Although the current political environment makes tax planning difficult at best, at least we know what will happen if nothing is done: Long-term capital gains rates will increase; regular tax brackets will change and go up; payroll and self-employment taxes will go up; higher income families will be subject to an itemized deduction and exemption phase-out. The biggest issue is probably Alternative Minimum Tax. If there is no fix this year, approximately 30 million taxpayers will be subject to AMT.
The typical advice of deferring income to future years may not necessarily be an appropriate strategy this year. These are issues that affect both the individual taxpayer and business owner alike. I recommend you meet with your tax advisor before the end of the year to determine an appropriate strategy based on your particular situation.
David Smith CPA
