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Tax Hikes and 2010 Tax Planning

July 12, 2010 by Mike Verville

The Wall Street Journal has an interesting and well written article by Arthur Laffer: Tax Hikes and the 2011 Economic Collapse.  Mr. Laffer makes some Economic Predictions based on the 2011 increasing tax rates and history lessons from earlier period tax rate increases.  Predicting the future is never easy or perfect, but we know tax rates are increasing in 2011, and you may want to consider taking advantage of the lower 2010 tax rates.

Due to the increasing tax rates, 2010 tax planning is going to be more important than ever.  We should discuss tailoring a specific 2010 tax plan.  Generally, the following should be considered:

1-      Income acceleration (when possible)

2-      Capital gain acceleration

3-      Harvesting and preserving capital loss carryforwards

4-      Expense postponement (when possible)

5-      Roth Conversions

Wallace Neumann & Verville does not provide investment advice.  However, we should work with your investment and legal advisors to help minimize your tax liability.



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