Should you revise your personal tax strategy?

Taxpayers need to reevaluate their tax strategy to take advantage of changes caused by the Economic Recovery Tax Act of 1981 (ERTA). Because of the across-the-board tax rate reductions, and the reduction in the top marginal rate, some taxpayers will benefit from deferring income to 1982 and accelera...

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Bibliographic Details
Published in:Industry week 1981-11, Vol.211 (5), p.79-79
Main Author: Klein, Tom C
Format: Magazinearticle
Language:English
Subjects:
Capital gains
Changes
Estate taxes
Income taxes
Keogh plans
Marital deductions
Methods
Tax cuts
Tax legislation
Tax planning
Tax rates
Tax shelters
Taxes
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Summary:Taxpayers need to reevaluate their tax strategy to take advantage of changes caused by the Economic Recovery Tax Act of 1981 (ERTA). Because of the across-the-board tax rate reductions, and the reduction in the top marginal rate, some taxpayers will benefit from deferring income to 1982 and accelerating deductions to 1981 if possible. Changes in the capital gains tax affect sales made after June 9, 1981. It is possible for some individuals to defer taxes through the new rules on individual retirement accounts (IRAs) and/or Keogh plans. It is possible some individuals will no longer need tax-sheltered investments because of ERTA. Another provision of the ERTA is for incentive stock options, which are taxed as capital gains rather than as ordinary income. ERTA contains changes in estate- and gift-tax rules that reduce the tax substantially or completely eliminate it, depending on the estate size. There is no limitation now on marital deductions for gift and estate taxes. There are changes in taxes on estates comprised primarily of closely held businesses.
ISSN:0039-0895
1930-8957