In 2012, many wealthy taxpayers are looking at the last year of a period of low capital gains rates, qualified dividend treatment and the ability to give away $5 million tax free during their lifetime or at death.
Big changes are afoot in 2013, likewise, for business owners who will see their ability to take large deductions for the cost of capital acquisitions massively reduced next year. All will be looking to their tax advisors for advice and assistance in planning for these changes.
James Duggan, founder and principal attorney at Duggan Bertsch LLC in Chicago, a business, tax, estate and wealth planning law firm, offers a checklist of items that tax advisors can keep in mind as they review the particular needs of their clients this year.
1. Early Meetings
Encourage clients to meet early in the year, rather than at tax time or year-end. This will give them ample time to review the prior year financials, upcoming year forecast and budgets and to figure out how best to pursue the new year's objectives from a tax perspective.
2. Capital Gains Transactions
Consider with clients who have a significant unrealized capital gain whether they should sell those assets and realize the gain this year while the long-term capital gains rate is set at 15%. In 2013, that rate is scheduled to increase to 20%. In addition, for clients who own businesses or stock positions that they intended to sell within the next one-to-three years, it may be best to push for that sale to occur in 2012 while the 15% rate still pertains.
3. Dividends in 2012
Work with clients who have built up corporate profits to devise a plan to maximize dividends this year when they can still benefit from "qualified dividend" treatment, which means corporate dividends are taxed at capital gain rate of 15%. In 2013, that beneficial rate is scheduled to expire and dividends will be taxed as ordinary income at the higher graduate rates, with the top bracket scheduled to be 39.6%.
4. Annual Gifts
Help clients avoid the common mistake of waiting until year-end to make "annual exclusion" gifts of $13,000. A gift early in the year gives their chosen recipient not only the principal but also any appreciation tied to the asset during the year.
5. Lifetime Gifts
7. Private Placement Insurance Portfolio 
9. Bonus Depreciation
