What is in this article?:
- Tax planning recommendations
- Tax cuts expiring
- Concentrate on what’s known
Year-end tax planning appears confusing as the political climate in Congress changes and Congress remains in a stalemate over extending tax cuts scheduled to expire on December 31, 2010.
Generally, year-end tax planning involves finding ways to accelerate or defer income and/or deductions based on this and next year's potential tax liability. However, because most of the tax cuts authorized by Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA), are scheduled to expire on December 31, 2010, unless Congress acts soon, tax rates will automatically go up for all individual taxpayers, including those subject to the lowest tax rates.
While Congress may not act until next year, tax planning now must concentrate on what we know.
Since the tax cuts enacted by the EGTRRA expire at the end of this year, the income tax rates and other provisions for 2010 will be very similar to last year, except for cuts that expired at the end of 2009.