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5 ways to ‘milk’ preferred tax rates … before Bush tax cuts disappear

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in Small Business Tax,Small Business Tax Deduction Strategies

The end for the Bush administration tax cuts may be near. Those rock-bottom tax rates for long-term capital gains and qualified dividends you’ve cherished the past few years are set to expire after 2010 … unless Congress takes action and the president agrees.

Strategy: Examine your investment options. Depending on your situation, you may want to accelerate capital gains and dividends into the current year or defer them into succeeding years.

Even if Congress extends the favorable current rules for capital gains and dividends, it’s by no means a sure thing that high-income earners will benefit.

Here’s the whole story: Prior to 2003, the maximum tax rate on long-term capital gain was 20%. Dividends were taxed at ordinary income rates reaching as high as 39.6%.

But a 2003 law lowered the maximum tax rate to 15% for long-term capital gains and “qualified dividends” received through 2008; 5% for taxpayers in the 10% and 15% ordinary ...(register to read more)

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