At the beginning of 2013, many tax rates and breaks were made permanent. The increased certainty brought by these tax law changes has in some ways made tax planning in 2014 a little easier.

But the changes also brought tax hikes to higher-income taxpayers — including the return of the 39.6% income tax rate and 20% long-term capital gains rate. In addition, some new and expanded taxes under the Affordable Care Act (ACA) now affect higher-income taxpayers: the 3.8% net investment income tax and the 0.9% additional Medicare tax.
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Tax planning last year involved preparing for significant tax increases scheduled for 2013, though there was uncertainty about whether those increases would be allowed to go into effect. On Jan. 1, 2013, Congress passed the American Taxpayer Relief Act of 2012 (ATRA), which prevented income tax rate increases for most taxpayers. Continue reading →

Ongoing changes in tax laws, an unpredictable economy and uncertainty about the future have made minimizing taxes more difficult than ever. This is especially true for investments, because the 15% rate on qualified dividends and long-term capital gains is set to expire at the end of the year — but could be extended. To complicate matters, some new tax breaks have gone into effect this year, but only on a temporary basis. Also, income and estate tax rates are scheduled to go up in 2011 if Congress doesn’t act. Continue reading →