Summary of tax law changes thru 2010

[Nords]

I've been vaguely aware that tax laws are changing each year, but I haven't really looked more than a year in advance.

Intuit has this summary on their website. Especially interesting to me (already mentioned by TH) is the fact that dividend & cap-gains rates are still dropping for those in the 10% brackets.

I think it might be worth stocking up on more dividend funds (like the Dow Dividend ETF, DVY) on the next dip. And maybe my contrarian Nortel & Sun stock would be better off sold for a Dogs of the DOW portfolio. In another year or so everyone's CPAs will be telling them to buy more dividend equities...

 

[TromboneAl]

That's very useful, thanks. And no spelling mistakes!

 

[maddythebeagle]

"Intuit has this summary on their website. Especially interesting to me (already mentioned by TH) is the fact that dividend & cap-gains rates are still dropping for those in the 10% brackets."

10% bracket, isnt that like 7000-10000 for singles? Are you suggesting that's all the ordinary income that I can make to get the best deal on capital gains and dividends.

 

[cute fuzzy bunny]

Actually its not that bad...for married filing jointly we have to get up into the 50-60k range (i'd have to go look at the table) before we get past the 15% bracket. The qualified dividends and long term capital gains rates in the existing program are really something. Thats why I made the major portfolio change (see: pimp my ride) recently. When single I needed high income and low relative portfolio volatility...now with an income to pay the bills, I dont want to boost my tax payments with nonqualified dividends (bonds, cd's, mm) and I can take more volatility without freaking out.

 

[maddythebeagle]

In 2008, the dividend tax rate goes to 0% for folks in the 10-15 % tax braket but in 2009 it expires. Does everybody see this getting expanded. It seems like a smart thing to encourage folks to do for themselves.

 

[cute fuzzy bunny]

I though that happened in tax year 2007...hmmm...and I'm looking forward to it. I have no problem engineering myself into the 10-15% bracket...

 

[maddythebeagle]

maybe I should work on engineering myself into the 10% bracket...

then the rest of my income in dividends and captial gains.....

 

[cute fuzzy bunny]

Its not that hard. Heck, married filing jointly with a dependend, we're almost $20k in just the standard deduction and personal exemptions. A little 401k/403b, a little IRA, get rid of ordinary income producing gidgets and replace them with dividend and capital gain sources...voila!