Paul Ferraresi

The media, Hollywood and other sources have been pushing the concept of global warming. Yes, we all have opinions about it, yet, it bothers me that both sides of the discussion are not presented with the same intensity.

What to look for…. the first step has been to “sell” the idea of a carbon footprint. Initially, business will be transacting carbon credits between themselves. Those who fall short will be “Taxed”. Next will be your autos in the bull’s eye based on its footprint. The auto’s carbon footprint will have an additional tax you will pay. Finally, your house energy consumption will be taxed. Before you give up your choice and control look at the other side of the discussion. Watch the political candidates you support. Remember, any government program that starts….never ends.

Here are a few sites for you to check out in your due diligence.

www.americanthinker.com/blog/2007/11/weather_channel_founder_global.html“

http://icecap.us/index.php/go/joes-blog/comments_about_global_warming/

A series of sunset provisions are set to become effective in two years will bring higher capital gains, dividends and estate taxes to you. These are the results of laws passed in 2001 and 2003.

The 15% tax rate on most long term capital gains and qualified dividend income is scheduled to remain effective until 12/31/2010. For the two lowest tax brackets the tax rate is Zero (0) for 2008, 2009, and 2010.

Beginning in 2011, capital gains rates return to pre 2003 levels of 20% and 10% respectively. Dividend taxes are set to revert to ordinary income tax rates (ouch) Estate taxes, scheduled to disappear in 2010, will reinstate in 2011 to the tax rates prior to 2001 (double ouch).

Keep in mind a new President, with a congressional majority, could pass a new law in 2009 and make the taxes higher retroactive to 1/1/2009. Caution – make and execute aggressive tax planning NOW! Do not wait until it is too late.

The capital gains tax rate reached 50% in the 1970’s. It dropped to 28% in 1978, President Reagan moved it down to 20%. The 2003 law moved dividend tax rates from ordinary tax rates of 39.5% down to 15%. This has been a boom for senior citizens since many live on dividends from major U.S. corporations.

Expect law makers to reach a compromise on estate tax providing and exemption on the first $3-4 million.

Again, like I have written many times, over the past years, you should develop a strategic rollout plan on your IRA’s/401Ks. As you can see taxes are going up. It would be better to pay taxes NOW @ lower rates than later at higher rates. There are ways to take up to $60,000 per year out of your IRA/401K without taxes.

Get some help…take action now, or, regret it later.

These new deductibility level increases the value of a little-known secret: The cost of long-term care protection for small businesses is tax deductible.

The Internal Revenue Service (IRS) has announced increased deductibility levels for long-term care insurance policies purchased in 2008. Small business owners should take heed, because millions of small and mid-sized business owners are still aware that the cost of long-term care insurance protection for themselves and their spouse may be fully tax deductible. It’s amazing how few accountants understand tax deductibility and discuss it with their clients. It’s very rare that an accountant brings up the tax advantage of long-term care planning, so, it’s really an opportunity for your investment professionals and insurance agents to bring up the topic.

To get the tax benefit, small business owners can, just like large businesses, set up a C corporation, which offers tax planning and liability advantages. Once the C Corp is established, the small businesses can create what’s called an executive carve-out plan. The business sets up a provision in their minutes that the [LTC] benefit is provided for a specific group. For example, you could say you have to be an officer of the company and have been employed for 6 years; that would exclude any other employees. So now the business is using pretax dollars to buy LTC insurance for the owner and his or her spouse, and it’s fully tax deductible.

In addition to the federal tax deduction, many states now offer tax incentives for individuals purchasing tax-qualified long-term care coverage.

According to AALTCI, the deductible limits under Section 213(d)(10) for eligible long-term care premiums includable in the term “medical care” are as follows: