Dear Clients and Friends,
This year we have had important changes in the tax law, and Congress hopes to make even more changes. The Tax Increase Prevention and Reconciliation Act changed the age threshold for the "kiddie tax," extended the lower rates on dividends and long-term capital gains through 2010, and will end in 2010 the $100,000 income limit for converting a traditional IRA to a Roth IRA.
The Pension Protection Act made permanent several provisions that were to expire soon, including Roth 401(k)s, the saver's credit, the retirement plan start-up credit, the tax-favored treatment of Section 529 college plans, and higher contribution limits to retirement plans. It also changed the rules for charitable contributions.
Constant tax revision makes planning essential if you want to keep your tax bill as low as the law allows. This Letter will alert you to tax changes and should encourage you to make time now to do some year-end and longer-term tax planning.
Please call if you have questions after reading this Letter or if you would like to get together to review your tax situation.
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