Fiscal cliff looming? Ten tax moves to make now.
Americans are facing an unprecedented tax increase of nearly $500 billion on Jan. 1, 2013, from the so-called "fiscal cliff." Are you ready? Here are 10 year-end tax strategies I recommend:
3. Replace taxable bonds with tax-free bonds
Because it’s tax-free, a municipal bond paying 3 percent is equal to a taxable bond paying 4.6 percent in the 35 percent bracket. It will be equal to 5 percent in a 39.6 percent bracket.
Taxpayers in higher brackets should move to municipals in their nonqualified (taxable) accounts.