Wednesday, April 20, 2011

The Winds of Change

Now that the tax filing date has passed and I have some extra time to notice what’s happening in the rest of the world, I’ll try and keep you posted as things of interest pop up. One thing that we should all be mindful of is the promise of change.

I know the word change has been overused a lot in the last few years when it comes to the political arena, but consider this:

Most of the provisions of the 2010 Tax Relief Act (affectionately known as the tax hike prevention act) that was passed late in 2010 expire again in 2012.

The President’s Tax Commission proposed major changes to the tax code in a report issued last August.

In the President’s speech last week he called for Congress to undertake “comprehensive tax reform” and said that we cannot afford to extend the "Bush Tax cuts”.

No matter how you look at the issue of income taxes, the least likely scenario you can imagine is status quo. In fact, its probably a safe bet that even if the rules remain the same through 2011, that 2012 will see some changes, and 2013 has the potential of massive revisions if Congress either (A) does nothing, or (B) decides to actually reform the tax code. Either way you slice it, taxes will be going UP.

Therefore, now is the time to start thinking about long term planning for your taxes, and how best to deal with the 2012 and beyond tax environment.

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