The outcome of the national and state elections will determine what is likely to happen with the Tax Code in the immediate future. It is fascinating that expert advisors are already setting up on-line and telephone continuing education for immediately after the election on the anticipated new tax codes. They already have a pretty good feel of what both sides are going to do. The vote in both the White House and in Congress are too close to call, and the outcomes will strongly determine what happens to the Tax Code next year.
The 2001 Taxpayer Relief Act, commonly known as the Bush Tax Cuts, expires December 31 of this year. The current version of that Tax Law will raise each and every income tax bracket for each and every earner in the United States. Capital Gains will go up on anybody and everybody who has any investments or savings of any kind or nature, and the Estate Tax Exemption will go down to roughly $1 million. This means that anything over $1 million in value that you have—including your house, your retirement accounts, your investments, your bank accounts, your personal property, the guns, the tools, the dog—are counted; if they value more than $1 million they will be hit with the Estate Tax on both the federal and the state levels. That number can be more roughly 50¢ per dollar on the amounts above the exemptions.
It’s anticipated that if the Republicans take the White House and Senate, that the current Tax Code will be re-enacted and placed back into effect so that our taxes will not go up.
It is well anticipated that if the President is re-elected, and especially if the Democrats hold the Senate, that the increased taxes will remain in effect.
The Chinese say, “May you live in interesting times.” We most certainly are, and it will be fascinating to see whether we voted for increased taxes or not. We’ll find our shortly after we have voted (or failed to vote).
At the Law Firm of Steven Andrew Jackson, Attorney and Counsellor at Law, we have helped hundreds of families protect themselves and their loved ones, avoid Estate Taxes and Probate Costs, and keep their Estate Plans current with the law through The Customized Protective Estate Planning Solution™.