All Things Financial Planning Blog

Limited Time Offer: Taxes on Sale through Year End 2012

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“Pay no tax before it’s time” is generally good advice, except when you think taxes may cost more in the future than they do now.  

What are the odds that tax rates could be higher after 2012? 

Ask yourself if you believe one of these two scenarios could happen: 

  1. Congress introduces new, higher taxes for wage income, capital gains and/or estates, or 
  2. Congress lets the current tax law expire at year end 2012, without a new tax plan, thereby defaulting to the higher tax rates that existed under “pre-Bush tax cut era”, as seen below.

Federal Taxes: 

2012
NOW

2013
“Pre-Bush Tax Cuts”

Top Rate on Ordinary Income

35%

39.6%

Unearned income Medicare Contribution Tax

0%

3.8%

Top Rate on Capital Gains
*18% for assets held > 5 years. 

15%

20%*

Top Rate on Qualified Dividend Income

15%

39.6%

Federal Estate Tax Exemption
(single person – married couple)

$5.12 – $10.24 Million

$1 – $2 Million

Top Rate on Estates

35%

55%

If it seems possible that you may pay higher taxes in the future, talk with your CPA and/or estate tax attorney now to explore legitimate tax saving strategies, such as:

  • Accelerating Income
  • Giving Gifts
  • Selling “Winning” Investments

Take the time to plan and save while you can. Hurry! The current deal on taxes may expire after December 31, 2012.

karinMaloneyStiflerKarin Maloney Stifler, CFP®, AIF®
President
True Wealth Advisors
Hudson, OH

Author: Karin Maloney Stifler, CFP®, AIF®

Karin Maloney Stifler, CFP®, AIF®, has practiced as a Fee-Only TM Certified Financial Planner® professional for over 18 years with nationally recognized firms in Boston, Chicago and her native Cleveland. She founded True Wealth Advisors based on her belief that fiduciary financial planning can benefit people from all walks of life, at all stages of life. She is honored to serve as a National Board member of the Financial Planning Association (FPA), where she led efforts to institute FPA’s national pro bono commitment after 9/11. Karin holds a BA in International Studies and MBA in Finance. Personally, Karin enjoys yoga and running in her quest for health, balance and energy to keep up with three growing sons.

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