I don't have a crystal ball, but I am smarter than the average bear (at least my daughter thinks so). The tax cuts implemented by the Bush administration are still in place during 2010.
Taxpayers in the 10% and 15% tax brackets pay no capital gains tax. Taxpayers in the 25% through 35% tax brackets pay only 15% on long term capital gains. That is scheduled to change in 2011 when the top rate goes to 20% and the zero rate goes to 10%. There is a chance that Congress could keep the rates the same for another year. Although the crystal ball (that I don't have) is telling me not to hold my breath.
On top of this, several other Bush administration tax cuts are set to expire at the end of 2010. As for income taxes, the top tax rate is scheduled to return to 39.6 percent from the current 35 percent and the 10 percent bracket would be eliminated.
Will this happen? Right now, it looks as if the 10 percent bracket is safe, but higher-income individuals might be facing increased taxes in 2011.
You might want to spend some time with your financial advisor to evaluate investment positions that have long term gains. 2010 might be the year to consider some re-positioning in your portfolio.
I need to find that crystal ball..........
(This article contains the current opinions of the author but not necessarily those of Brighton Securities Corp. The author's opinions are subject to change without notice. This blog post is for informational purposes only. Forecasts, estimates, and certain information contained herein should not be considered as investment advice or a recommendation of any particular security, strategy or investment product. References to specific securities and their issuers are for illustrative purposes only and are not intended and should not be interpreted as recommendations to purchase or sell such securities).