The Democrats just introduced legislation in Congress that will not pass, but does give us an indication of what's to come in 2009 if the Democrats retake the White House and retain control of both houses of Congress. There will be debate over the estate tax, and all of the tax cuts that we have had over the last 8 years will be out the window.
There will be some tax cuts, especially in the area of the alternative minimum tax and standard deductions. In addition, those low income people not paying income tax and still getting a refund through the earned income credit will be getting even more money back. To fund this there are a number of tax hikes that will impact us.
- They are proposing a surtax of around 5% once your income gets above a certain level.
- Tighter limits on itemized deductions for persons doing the long form.
- Tighter limits on who can claim the normal personal exemption amount.
- Less miscellaneous itemized deductions.
- Self employment tax on all S Corporations and Partnerships.
It is going to be a mess, but trust that we will keep you posted.
Larry Kopsa CPA
