Pay Now or Pay Later??

Posted on February 4, 2011

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The general rule has always been to save taxes by delaying income until next year and accelerating deductions into this year.  However, this year we still don’t know what the tax law will be in 2011 and beyond.  Based on how congress failed to act on the estate tax and let billionaires pass away in 2010 with no estate tax, we make no predictions on next year’s tax rates.  As it stands now, the Busch tax cuts will expire and tax rates will go up January 1, 2011 which means you will pay more tax on the same dollar in income next year than this year.  You tell me what congress will do and I will tell you what you should do in year end tax planning.

 

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