Year-End Financial Planning: Bracket Management

Because of the multi-dimensional tax environment that now exists post-American Taxpayer Relief Act, CPA financial planners must look at the tax impact on clients’ financial plans through a 5 to 10 year horizon. Ordinary income tax rates from the Bush Administration were made permanent. The capital gains rate increased from 15% to 20% for taxpayers with income greater than the threshold amounts. Phase-out of personal exemptions and limitations on itemized deductions (Pease) become critical in managing tax brackets by shifting income and deductions into certain years. This podcast from Bob Keebler provides a overview of theory, strategies and case studies in bracket management.