Although the reduced rate has been extended through the year 2010, it is important to note that the lower tax rate applicable to Capital Gains and certain qualifying dividend income of fifteen (15%) percent was scheduled to be phased out at the end of 2008. However, with the shift in the congressional landscape, the growth of the deficit, the pressure on Social Security, and the cost of the war in Iraq, there is a strong possibility that the issue of those tax rates, or for that matter, all tax rates in general, will be revisited sooner rather than later. As such, taking advantage of the current rate structure should be borne in mind with your income timing and related investment plans and planning.
By: Bruce M. Fogel, Esquire