Taxes and you: 8 steps to take if Bush tax cuts expire

Maybe you’re trying to ignore the possibility of the President George W. Bush tax cuts expiring. Or perhaps the whole topic is too confusing.

Certainly, everyone will be impacted if the tax cuts enacted by Congress in 2001 and 2003 go away. Here’s what Bankrate.com says about it:

So what exactly will you encounter if next year arrives without any alterations to the current tax law? You’ll face higher income tax rates, more taxes on investment income, fewer tax breaks for families, the return of so-called stealth taxes and a tougher estate tax.

But, there are steps you can take in some instances to prepare for tax increases.

Among the adjustments cited by Bankrate.com is converting a traditional IRA to a Roth IRA. Money taken out of a Roth IRA is tax-free. For 2010 only, you also have the option of deferring any tax that might be owed on the conversion and paying it in equal installments in your 2011 and 2012 tax filings.

Atlanta-based certified financial planner Cass Chappell, who is also a regular contributor to the Atlanta Bargain Hunter blog, had this to say to Bankrate:

“At first blush, it is an incredible opportunity,” said Chappell of the conversion tax deferral option. However, individuals who are now in or expect to be in a higher tax bracket in coming years might want to pay all the tax due at the 2010 rates instead of possibly facing a 35 percent or higher tax rate.

For other detailed tips from Bankrate.com on preparing for the potential end of the tax cuts, click here.

Follow me on Twitter @atlbargains and on Facebook at AJC Atlanta Bargain Hunter




10 comments Add your comment

Another Idea

September 14th, 2010
5:52 pm

Remember that the best way to avoid repeal of the Bush Tax Cuts (AKA an Obama Tax Increase) is to vote for conservative candidates who believe the government takes too much of peoples’ money–not too little. &#9786

athensguy

September 14th, 2010
6:32 pm

Remember, the best way to avoid the EXPIRING of the Bush tax cuts (a Bush tax increase) is to vote for “conservative” candidates that think it’s ok to waste trillions of dollars on war without paying for it. Or…we probably have to pay for the exorbitant debt accrued by right wingers eventually.

obama is toast

September 14th, 2010
6:41 pm

Bush piled up 4 trillion in debt over his eight years in office…. Obama piled up 4 trillion in debt in 18 months. And no one is better off. Get these yahoos out of office quick.

hdhd

September 14th, 2010
8:08 pm

You don’t have to pay any tax if you don’t make any money. Everyone quit your jobs!

Browncoat

September 14th, 2010
9:22 pm

If Obama and the Congress raise taxes during a recession, well a revolution would be about right……..

wlh

September 14th, 2010
9:48 pm

Get the FACTS straight…Bush left our country 12.7 Trillion in debt when he left office go pull up the debt clock and check it on the internet….Also, OBAMA wants to give the middle class tax cuts its the Republicans in the senate who want to block it. Get informed dont just listen to garbage…

Not entitled

September 14th, 2010
10:26 pm

Teddy & FD Roosevelt arranged the Declaration of Dependence with Social Security, the Great Society all think that it’s a great idea, but it’s gotta STOP here. It’s a very sick system that pays lifetime SSI benefits to a person born with severe retardation–LIFETIME.

Browncoat

September 14th, 2010
10:29 pm

WLH, you are kidding right? I would agree that Bush didn’t practice sounf fiscal policies, however that is no excuse for this administrstions transgressions. The Republicans are pushing for no tax increase for any American, which is why they oppose Oboma’s plan to raise taxes on the higher tax brackets. I work with small businesses, and unfortunately they would be affected by this potential tax increase. I know for a fact that many of these businesses are holding off hiring until the tax situation is settled. As such, the unemployment numbers stagnate while Congress and the Obamas vacation in places like Marthas Vinyard. Get rid of the socialist elitist in the White House in 2012!

lynn

September 14th, 2010
10:32 pm

Oh, by all means, let’s vote for Republicans’ policies, which got us in this mess in the first place.

Ole Guy

September 16th, 2010
2:56 am

Many of you seem cocoon yourselves…perhaps rightfully so…in the notion that current fiscal problems are entirely the fault of government, that you, as (possibly less-than responsible) consumers are mere innocent victims of forces far beyond your control. Before lashing out at the illusive “THEY”, you may be wise in admitting, at least to yourselves, that YOU have played a role in the problems with which YOU must now contend.