Jeremy Wilson, supervisor at Draffin & Tucker LLP, was quoted in the article, “Pay Zero Taxes! Use These Tips and Strategies to Reduce Your 2012 and 2013 Income Tax Bills,” that appeared in a special edition of The Franklin Prosperity Report.
The report highlights the highest-impact, easiest tax deductions and credits to claim and shows actionable steps that most people can and should take to soften the impact. When it comes to investing, there are breaks for risk takers; but if politicians fail to reach a compromise on the Bush-era tax cuts, taxes across the board will rise abruptly overnight.
While almost everyone will get hit somewhere, investors are in for a nasty shock: Brackets will rise to a maximum of 39.6 percent, the capital gains rate will jump to 20 percent from 15 percent, and dividend taxes will more than double to prevailing income rates vs. the current 15 percent. Add on top a 3.8 percent tax on “unearned” income (such as from investments and real estate) to pay for Medicare as part of healthcare reform.
Normally, tax advisers say that it’s better to put off realizing gains. With such significant increases in the pipeline, advisers find themselves giving the opposite advice now, says Jeremy Wilson: “It’s so contrary to the advice I usually give, as far as accelerating income into a prior year. But I’m feeling comfortable that, as long as from an investment side it makes sense, as an adviser, I’m telling people to lock in gains while rates are low. From a tax side, it does make sense.”
For more information on this and other tax strategies, please contact Jeremy Wilson at email@example.com.