Kelly C. Ruggles Home
Kelly C. Ruggles Book Chapters
Kelly C. Ruggles Introduction
Kelly C. Ruggles Financial Planning
Kelly C. Ruggles Retirement Plans & IRAs
Kelly C. Ruggles Insurance and Asset Protection
Kelly C. Ruggles Medigap
Kelly C. Ruggles Long-Term Care
Kelly C. Ruggles Estate Planning
Kelly C. Ruggles Investing
Kelly C. Ruggles Taxes Information
Kelly C. Ruggles Planning
Kelly C. Ruggles Newsletters
Kelly C. Ruggles Speaking
Kelly Ruggles Resources
Kelly Ruggles Contact Us
The web site of Kelly C. Ruggles. Kelly C. Ruggles, President of American Reliance Group, Inc., is a well known educator and fee-based financial planner. |
Kelly Ruggles is the author of "The Financial Playbook" for Retirement.
Kelly C. Ruggles, Financial Planner and Educator

Suggested Reading by Kelly C. Ruggles        Back to Article Main Page

Aug, 2010
2011: A Taxing Year Ahead?

No one wants to pay more taxes, but as tax laws currently stand, many Americans may end up opening their wallets a bit wider next year when it comes to paying the IRS. Tax laws that are scheduled to change at the end of 2010 are likely to affect how much tax consumers pay on income, capital gains, estates, and other areas of their finances.

You may want to keep the following scheduled changes in mind, but remember that Congress can amend the tax code before these modifications actually take effect.

Capital gains: Maximum rates on long-term capital gains are scheduled to jump to 20% in 2011 from 15% in 2010. Currently, those in the 10% and 15% tax brackets do not pay taxes on long-term capital gains. Next year, the lowest capital gains tax rate will be 10% for those in the 15% marginal income tax bracket.

Rates on short-term capital gains and income: Short-term capital gains on investments held for one year or less are taxed as ordinary income, and these rates also are scheduled to bump upward next year. In 2010, federal income tax rates are 10%, 15%, 25%, 28%, 33%, and 35%. Beginning next year, the lowest tax rate of 10% will be eliminated and the remaining rates will be 15%, 27.5%, 30.5%, 35.5%, and 39.1%.

Dividends: Beginning in 2011, dividends are scheduled to be taxed at ordinary income tax rates, up from a maximum of 15% for most taxpayers in 2010. Given the rise in rates on ordinary income scheduled for next year, many investors with dividend-paying stocks could find themselves losing a significantly larger portion of their dividends to taxes.

Estate taxes: In 2011, according to current laws, estates in excess of $1 million will be subject to a maximum federal estate tax of 55%, and potentially higher for some larger estates. In the meantime, the federal estate tax has been rescinded for the 2010 tax year only. Estate tax regulations are complicated, and you may want to consult a qualified legal or tax professional to determine how these changes could affect you.

Gift taxes: The top gift tax rate on gifts valued above a certain threshold ($13,000 in 2010) presented to a nonspouse is 35% in 2010. There is a $1 million lifetime exclusion amount, which is applied to a person's taxable estate at death. The $1 million exclusion amount can be applied to either gifts or estate taxes for 2011 and beyond. 

The information in this article is not intended to be tax advice and should not be treated as such. Each individual's tax situation is different. If you have questions about tax planning for 2010 and beyond, be sure to consult with a tax professional.

© 2010 Standard & Poor's Financial Communications. All rights reserved. | Sitemap | Disclosure

©2010, Kelly Ruggles, Spokane, WA. Web site
Kelly C. Ruggles, Spokane, WA. is a fee-based financial planner located in Spokane.
Kelly C. Ruggles, Spokane, WA. President of American Reliance Group, Inc., a registered investment advisor.
Kelly Ruggles, Spokane, WA. is the author of "The Financial Playbook" for Retirement

Kelly C. Ruggles, Spokane, WA. Does not intend to provide personalized investment advice through this publication and does not represent the strategies or services discussed are suitable for any investor. Investors should consult with their financial advisors prior to making any investment decisions.