Did You Know Your Taxes Are Going Up?

At a recent national meeting of the American Academy of Trust, Estate and Elder Law Attorneys, a premier educational seminar for estate planning attorneys, a major topic we discussed was taxes.  There are some important increases that you should know about.

Taxes are scheduled to increase dramatically in 2013: 

 

                                                                           2012                  2013

Estate and Gift Tax – Top Tax Rate                       35%                   55%

Estate and Gift Tax Exemption                              $5 million           $1 million

Federal Income Taxes – top rates

         Capital Gains                                              15%                   20%

         Qualified Dividends                                      15%                   39.6%

         Interest & Compensation Income                  35%                   39.6%

        

In the current political climate, Congress and the President are not likely to reach a compromise on these issues.  What does this mean for you?  2012 is a year of opportunity while taxes are lower.  It would be wise to schedule an appointment to review your estate plan before September 1, and see if there are steps you can take to improve your family’s position.  If you wait to the last minute, it may not be possible to put a plan in place before the law changes.