Tax breaks come and tax breaks go. But this year is different.
Strategy: Prepare for the possible loss of several critical tax winners at the end of 2012. These include the “Bush tax breaks” that were initially passed a decade ago.
On the other hand, certain other tax provisions are likely to be extended, including the annual “patch” for the alternative minimum tax (AMT) and tax incentives for energy-saving home improvements.
Here’s a quick rundown of nine key tax breaks for individuals and small business owners slated for the endangered list.
1. Tax rates: Absent any legislative action, tax rates will be higher in 2013. The income levels for all tax brackets will be adjusted upward and the “marriage penalty” for joint filers will become harsher. In addition, the two top tax rates of 33% and 35% will be replaced by rates of 36% and 39.6%, respectively.
2. Capital gains and dividends: For 2012, the maximum tax rate for long...(register to read more)