Currently the maximum federal tax rate for qualified dividends and long-term capital gains is 15%.  This is great for people like Warren Buffett, who live off of investment income.  However, these low tax rates for wealthier investors will soon be a thing of the past.

Unless legislation is passed to continue the current rates for qualified dividends, next year all dividends will be taxed at ordinary income rates.  The top rate for ordinary income, currently 35%, goes up to 39.6% in 2011.  Then, in 2013, the 3.8% investment income surcharge kicks in, making the total maximum rate 43.4%.

The long-term capital gains rate will increase to 20% next year, and the surcharge beginning in 2013 will mean the top rate will be 23.8%.

These hefty tax increases will trigger a greater interest in tax deferral strategies such as cash value life insurance and tax-deferred annuities, and may motivate more intra-family income shifting strategies such as limited liability companies.

 

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With no estate tax in 2010,  the prospects of reinstatement diminishing daily, and the ever more probable $1 million exemption in 2011, my staff has been working hard  to notify our existing clients that they should come to have their wills or trusts updated.

Many older wills and trusts contain formulas or distribution schemes based on the existence of the federal estate tax, and will not work as intended if the testator/grantor dies this year.

The Revenue Law Study Committee of the NC General Assembly has produced a draft bill that will alleviate this problem by providing that the the will or trust provisions would be interpreted as if the 2009 estate tax was still in effect.

However, even if the bill passes, it should not be viewed as a panacea - any person or couple with assets in excess of $1 million should have their estate plan reviewed as soon as possible.  I have already had at least one client die with the outdated language still in place.

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Seriously, can you?  Do you see it?  Can you taste it?  Do you know what it feels like?  Can you focus on it? What am I talking about? Dreams. I don’t mean the ones that you have at night (I can’t seem to remember mine, though I’m sure some of you can – but those aren’t the ones [...]
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My Carolina Today is a new show on NBC-17 focusing on Central Carolina. So, why am I telling you about this? Well, if you’re in the area, this an interesting show to keep up on local events, trends and information. What if you’re not local? Oh heck, whether you’re local or not, I wanted to share this [...]
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Have you ever had a time in your life when you’re simply going through the motions without passion? I started out my business, The BUZZ Builder, extremely passionate about what it is that I do and was thrilled every time someone would make changes that made a significant difference in their business! I lived for it, [...]
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I know… What in the world do vegetables have to do with succeeding in your business? Several months ago, I read an interesting article about eating your vegetables. The author stated that when he was young, he would eat his meat with flourish and sit for an eternity staring at his vegetables. He knew that his mother [...]
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Many thanks to Tom, one of our awesome followers on twitter, for sending us this great picture of his son enjoying two gallons of Smithfield’s Chicken ‘N Bar-B-Q’s famous sweet tea! (How cool that even little fans enjoy the value of $1.99 gallons of sweet tea during the Summer of 20Tea! ;-)) Happy Summer of 20Tea to [...]
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North Carolina favorite for bar-b-q launches summer campaign for sweet tea lovers, tailgaters, and summer fun goers ________________________________________ (Cary, NC) – Smithfield’s Chicken ‘N Bar-B-Q® (SCNB) officially kicked off the “Summer of 20Tea” this weekend, celebrating all things summer and sweet tea with a three-month campaign promoting the restaurant brand’s $1.99 gallons of fresh brewed sweet [...]
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This weekend marks the beginning of the SUMMER OF 20TEA! All summer long enjoy gallons of our refreshing tea for only $1.99 a gallon! Visit www.summerof20tea.com to find out more!
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Local readers cast their votes for SCNB as their favorite bar-b-q, in eastern Wake County and Johnston County (Cary, NC) – Smithfield’s Chicken ‘N Bar-B-Q® (SCNB) is honored to have been named as a Triangle East Magazine Readers’ Choice Awards favorite in the deliciously competitive category of “Best Barbecue”. Diners in the areas that are located in [...]
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