In 2010 the estate tax will be repealed and the gift tax rate will fall to 35%. However, this repeal is effective only for that year and the estate tax will be reinstated in some form the very next year (2011). The US Senate is considering options to reduce or eliminate the estate tax. Currently, the estate tax only applies to fortunes over $2 million (at 46%) and is estimated to affect 12,600 taxpayers in 2006.
Current tax law allows a 15% tax rate on Long term Capital Gains income and qualified domestic dividend income. This 15% rate is set to expire at the end of 2008. In tax year 2009, the dividend income tax rate will be raised to the same rate as ordinary income and the long term capital gain tax rate will be raised to 20% for all taxpayers above the 15% bracket (a 10% capital gain rate applies for taxpayers in the 15% bracket).
On August 1, 2006, the House passed H.R. 5970 which proposes that the 15% capital gain tax rate be extended to 2015. Under this tax bill the estate tax would also be reinstated up to year 2015, exempting estates of less than $5 million in assets; Estates of $5 to $25 million in assets will pay a statutory tax rate of 15%; and estates with more than $25 million in assets will have a statutory tax rate of 30%. Also under this proposed bill the state tax death credit is repealed and no deduction is allowed for state estate taxes paid. The 5% surtax is also repealed.
The final outcome of the estate tax bill is yet to be determined. However, the indications are that an estate tax will be reinstated after year 2010, albeit the tax rate will be lower than current laws mandate.
Ten Tax Planning Ideas for Small Businesses in 2009
If you are a small business owner looking for cost cutting ideas here are ten tax planning ideas that may result in substantial tax savings. The following article highlights planning areas often missed by business owners. You should consult a qualified tax advisor to determine if any of these areas are appropriate for you and your business.Selling Gold Coins
Q: My mother-in-law wants to convert some gold coins, specifically American Gold Eagles and Canadian Gold Maple Leafs, into CDs and/or money market funds. How does one convert gold coins into cash in order to do this? What are the IRS reporting requirements?Disclaiming An Inheritance
There are a few rules that you should be aware of when making a qualified disclaimer.