It is hard to believe that the tax cuts enacted back in 2001 (Economic Growth And Tax Relief Reconciliation Act of 2001) are set to expire at the end of this year.
Many of us have grown accustomed to the lower tax rates and have shifted our earning streams to use this to our advantage.
The biggest changes starting in 2011 (assuming, of course, no new tax law changes) will be the increase in the marginal tax rates, the increase in capital gains rates and the elimination of qualified dividends rates.
In 2011, the top income tax rate goes back to 39.6 percent, and the special low 10 percent bracket is eliminated.
The maximum long-term capital gains tax rate goes back up to 20 percent from 15 percent. The lower rate paid by taxpayers in the 10% and 15% tax bracket will also sunset at the end of this year.
Also in 2011, dividend income (other than capital gain distributions from mutual funds) is taxed as ordinary income at your highest marginal tax rate. There will no longer be a special rate or category for qualified dividends.
There are many other tax provisions which will sunset at the end of 2010 but the planning process to deal with these changes should begin now.
If you would like to sit down with us and review how these changes will impact your financial and tax situation, please let us know.
About Blackman & Sloop CPAs, P.A.:
Blackman & Sloop is a full-service CPA firm headquartered in Chapel Hill, North Carolina and is actively involved in auditing, taxation, management consulting, financial planning, and related services. The firm directs a large part of its services toward providing management with advice on budgeting, forecasts, projections, financing decisions, financial analysis, and tax developments. The firm also performs review and compilation services and prepares not-for-profit, corporate, individual, estate, retirement plan, and trust tax returns as well as technology consulting services regarding installation and training on QuickBooks. Blackman & Sloop provides services in Raleigh, Durham, Chapel Hill, RTP, Hillsborough, Pittsboro, Charlotte, and the rest of North Carolina. To find out more please visit http://www.blackmansloop.com
Contact: CPA firstname.lastname@example.orgToll Free: 1-877-854-7530 The Exchange West 1414 Raleigh Rd, Suite 300 Chapel Hill, NC 27517