This is the time of year when most of us spend a lot more time thinking about tree-trimming than tax-trimming. But year-end is a time when you really should do some planning.
Every year we sit down with a tax pro for predictions on the year ahead and tax tips. Here was the prediction he gave us last year at this time:
“The general feeling right now is that taxes are going to go up. Probably going to have an increase in capital gains tax rate, may have a tax on the rich to pay for some of the deficits we’ve had over the past couple of years.”
-Ken Strauss, CPA / Berkowitz, Dick, Pollack & Brant
Our expert said that last November; Barak Obama has been saying it ever since…and it might just happen sometime in 2009.
“What we think is gonna happen is that the Bush tax cuts will be repealed. In other words, the top rate of 35% will probably go up to 39 and a half percent.”
-Ken Strauss, CPA / Berkowitz, Dick, Pollack & Brant
But that’s for people in the highest brackets. If you’re not quite there yet, despite what the Republican campaign ads said, your taxes probably won’t rise in 2009.
“If you make $50,000 or less, I think you can feel pretty secure that your taxes are going to either remain the same or be reduced.”
-Ken Strauss, CPA / Berkowitz, Dick, Pollack & Brant
And predictions like this matter, because they affect your planning. For example, if your bracket is going up, you might want to take stock gains this year… at least if you have any.
So that’s step one in year-end tax planning: thinking about what’s ahead. But that’s just the tip of the iceberg.
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