by Stacy Francis, CFP®, CDFA
During a recent teleconference, several Savvy Ladies members expressed concern about what will happen to their tax bills now that Obama is in the White House. And it is no wonder people are nervous. Media has been bombarding us mixed messages - both prior to and after the election - some claiming the tax burden for the middle class is about to double. While Obama’s plans will doubtlessly change as the economic climate changes, below is a general overview.
Obama has promised to cut taxes for low- and middle-income families, and at present it looks like he is good for his word. He has also said that he does not intend to make the tax cuts that former president Bush implemented for individuals with more than $250,000 in annual income permanent, but rather let them expire according to the current schedule. Furthermore, Obama has mentioned higher taxes on dividends and capital gains. Later, he has said that raising taxes for high-income individuals is not a priority right now - although there are also hints to the contrary.
In short, if your income is below or around average, expect tax breaks. If you make more than $250,000 per year, at some point you will face higher taxes, both on your income and on your investments. But when these increases will take place remains to be seen.