Graffiti Art

Tax planning is squeezed as Washington nears a deal
A tax compromise worked out between the White House and Republicans could turn a lot of year-end tax planning on its head, according to a Reuters blog post. With taxes lower than expected, an advantage from deferring deductions and accelerating income would disappear.
There would no longer be any incentive to sell investments in 2010 in order to lock in a lower capital-gains tax rate because the rate would not change Jan. 1. Reuters/Deep Pocket blog (12/6) , Forbes/Estate of Confusion blog (12/6).

The above is the latest information from the AICPA news service regarding the state of year end tax planning. Click on the title to read the full article.  As you've probably heard on the news it looks like the Bush tax cuts will be extended for all taxpayers.  If capital gains rates do not increase as was expected, then there is no tax incentive to sell appreciated investments in 2010 to take advantage of a lower tax rate as mentioned in my previous blog.  

Tax planning has been more difficult than ever this year.  It's not certain how the whole tax debate will shake-out.  I imagine there will be a lot of people waiting until the last minute this year before they make any major year end tax planning moves.  If you need assistance deciding on how you should arrange your financial affairs in ways that postpone or avoid taxes please contact me.  I will be watching the tax debate closely so you can also contact me for further updates between now and the end of the year. 

Andrew Jordan, CPA
 248-514-6213.