07 Nov Tax Changes in T Minus…The Countdown Begins.
The results are in. We have a sort of status quo on the federal level for at least the next two years. What does that really mean going forward? Well, one of the bigger issues as it relates to estate and tax planning for individuals, business owners, real estate investors and many others is the potential for a dramatic tax change from what we currently have in place.
The “Bush-Era” tax cuts are all set to expire in about a month and half. To estate planning the biggest concerns may be the drop in the Estate & Gift Tax from a $5 million exclusion to $1 million in January with the rate over the exclusion amount going from the current 35% to 55% in 2013. However, income taxes, capital gains, dividend rates, employment taxes and others all will have to play into personal and business planning. after all
Now, that said the real question is will we see all of these tax changes truly occur in the next couple months? It takes a collective effort on the part of Congress and the President to change anything before 12/31 so we will see if status quo can produce different results than it did in the past couple years. The hope as always is we compromise and can come to a result that is reasonable for most and will provide some planning protection avenues for those outside of the bell curve.
At this point your guess is as good as mine (it is Politics after-all), but it truly may be a time to consider your personal or business planning and what impact the inevitable changes may create and what can be done to plan for them.