Personal Opinion: What will happen to taxes in 2013?

With the election over, the two parties can now (hopefully) focus on tax reform.

CORPORATE TAX REFORM: Both parties agree that lowering the overall corporate tax rate while eliminating deductions and “loopholes” is a good idea… so I imagine that this will get done and get done separately from reforming individual income taxes.

INDIVIDUAL INCOME TAX REFORM: Both parties do not agree on how to do this. Democrats want higher taxes on upper income individuals and Republicans want lower tax rates with the elimination of deductions, credits and “loopholes”. My guess is that we will not have tax reform legislation passed this year. Instead, the so-called “Bush Tax Cuts” will expire on December 31st, 2012. At that time, Congress will then act to find a compromise between the competing alternatives mentioned above… higher taxes on upper income individuals with parts of the Bush Tax Cuts re-enacted for lower income individuals. In effect, it will a partial re-enactment of the Bush Tax Cuts.

Regardless, it is a good time now (despite the uncertainty) to do tax planning for 2012, 2013 and beyond so you are not surprised by anything.

This entry was posted in 1040 Personal Income Taxes, 1065 Partnership Income Taxes, 1120 C Corporation Income Taxes, 1120 S Corporation Taxes, Small Business. Bookmark the permalink.

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