Today I Am Guesstimating Our 2012 Taxes

Got a newsletter from our tax accountant. It says:

“Take Advantage of the 0% Rate on Investment Income. For 2012, the federal income tax rate on long-term capital gains and qualified dividends is 0% when they fall within the 10% or 15% federal income tax rate brackets. This will be the case to the extent your taxable income (including long-term capital gains and qualified dividends) does not exceed $70,700 if you are married and file jointly ($35,350 if you are single).”

We have fallen into the 15% tax bracket and income category in the past year or so. 2012 might be a good year to liquidate some of our assets. I have a bad feeling about what’s coming down the pike, economy-wise. Might be time to batten down the hatches. In fact, we should have done this in 2011, when we first fell into the 15% marginal tax bracket. Woulda, coulda, shoulda!

So, I’m guesstimating where we’ll be for 2012. Don’t want to liquidate so much that it pushes us into capital gains territory. Under current law, tax rates on long-term gains are scheduled to revert in 2013 to their pre-2003 levels of 10% for taxpayers in the 15% bracket and below and 20% for taxpayers in higher tax brackets. 

If the Bush tax rates are extended, then we’ll consider taking advantage and liquidate more assets in 2013. Or maybe we’ll just pay the 10% capital gains. We’ll see how things go.

(A future post will be about saving money by no longer having a tax accountant. But that won’t be until we fully shut down our business and no longer need one. I can figure out our personal taxes, including rental properties and writing royalties. Just feel we need an accountant for the S corporation side of things.)

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