28.3 Watch for Tax Law Changes

Tax planning has been complicated by the political gridlock in Washington that has kept the House, Senate, and Administration from agreeing on the fate of the Bush-era tax cuts beyond 2012. After the 2012 elections, an agreement will have to be reached as to whether to continue the pre-2013 tax rates on ordinary income and the preferential rates for capital gains and qualified dividends for all or just some taxpayers. The fate of these provisions as well as the future of numerous tax credits and deductions, as well as the estate tax, is uncertain as 2013 approaches. Longer term, the 2012 elections could set the stage for a major tax reform effort that may result in the cutback of long-standing tax benefits. See the e-Supplement at jklasser.com for an update on tax legislation developments.