The top marginal tax bracket on qualifying dividends is 15 percent through the remainder of 2012. Next year, the rate is slated to go up to 43.4 percent.
Planning is one thing, but taking action is another. Right now, when it comes to taxes, the time may be right for small business owners to take action.
Forbes recently wrote an article titled, “Taxes are Low - Move it or Lose It!,” explaining that taxes may take a turn for the worse – and soon - once the calendar rolls over to 2013!
Right now capital gains and dividend taxes max out at 15%. After the year’s end, however, these rates are set to lapse and skyrocket to 23.8% on long-term capital gains and 43.4% on qualifying dividends. So, what is a small business owner to do?
The original article in Forbes provides some practical actions to take, including:
- If you are selling all or part of your business, do it now.
- If you have any qualifying dividends available for distribution, do it now.
What else should be done? Certainly the original article offers some additional pointers, but the specific actions depend on your unique circumstances.
Regardless, this is a perfect time to schedule that consultation with your financial, tax and legal advisory team, sooner rather than later.
Reference: Forbes (July 24, 2012) “Taxes are Low - Move it or Lose It!”