No one wants to be taken by surprise with a super high tax bill for 2011. With only four months remaining until the expiration of Bush’s tax cuts enacted in the 2001 EGTRRA Bill, a lot of Taxpayers are holding their breath while they scramble to plan for a wide range of alternatives.
We are likely to see one of the following scenarios (or a combination thereof):
- Congress does nothing and allows the Bush tax cuts to expire (the tax laws from 2001 will reactivate on Jan. 1, 2011);
- Congress passes legislation to extend ALL of the Bush tax cuts (Congressional Republican’s Position);
- Congress passes legislation extending SOME of Bush’s tax cuts (Obama’s Plan- extend some of the stimulus measures, place new limitations on itemized deductions and allow the tax cuts benefiting taxpayers making $250,000+ to expire); or
- Congress passes the legislation recently proposed by Congressional Democrats (similar to Obama’s plan but without extending stimulus measures and with no additional limitations on itemized deductions).
Despite the legislative unpredictability, taxpayers can still stay a step ahead by putting together a game plan for each of the possible tax scenarios above.
So check www.MyTaxBurden.org to see where you stand…however Congress decides to act (or not act).