News
In a recent Baltimore Business Journal article "Tackling 2011 Tax Changes," Reznick Group Tax Principal Kurt Sturn provides readers with insight on the implications to investors of the two-year extension of the Bush tax cuts.
Under the Tax Relief, Unemployment Insurance Authorization and Job Creation Act of 2010, the tax on stock dividends and capital gains will remain at 15 percent through 2012. The tax rate on dividends could have jumped to as high as 39.6 percent on Jan. 1, 2011, and the rates on capital gains could have risen to as high as 20 percent, if the Bush cuts were not extended.
Sturn said, "The old, lower rate would have applied to the 2010 tax year, but the changes could have caused taxpayers with substantial stock holdings to adjust their portfolios to jettison dividend-paying stocks in favor of non-dividend payers."