Beginning 2011, the Internal Revenue Service (IRS) will require professional tax preparers to register, pass competency tests and enroll in continuing education classes.  Certified public accountants, attorneys, and tax practitioners called enrolled agents will not be subject to these new competency requirements.  Representatives from the IRS have said that regulating this seasonal industry is reasonable especially given the impact the activity could have on a person’s life. The top national tax preparation companies have welcomed this new program; they typically train and test their employees on a seasonal basis.

Tom Herman from the Wall Street Journal advises that while tax rates on investment income will remain stable in 2010, don’t expect the same in 2011. Remember 2010 is yet another election year.  Rules regarding long-term capital gains and unearned income like dividends will still hold at 15%; gains held for less than a year will be subject to your marginal income tax rates.  Also keep in mind that gains on some art and collectibles are taxed at a higher rate; 28%. Assuming our US Congress pays more attention to the business of securing their re-election, rates will not change until 2011.  But then the proverbial fecal material hits the fans on Capital Hill! Expect an automatic rise on capital gains to 20% as of Jan 1, 2011. Top tax rates on dividends are scheduled to rise to 39.6%.  Our President has proposed new and significant tax “reforms” starting after the 2010 election year; “business as usual”.  While no one can predict these or other “tax reforms”, budgetary concerns and increasing deficits compounded by world-wide economic issues do NOT augur well for anything other than SIGNIFICANT tax increases on income.  Remember too that Congress still has not “officially” outlined how the cost of employee health care issues will be “shared” by government, the private sector, and the “average” Joe and Jane trying to balance their home budget and pursue their dreams.