Accountants Agitated Over Fiscal Cliff Uncertainty

It's a nerve-racking time for CPAs as they wait on specificity from Congress and the IRS.

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[Related: Obama to Appeal to Public on Fiscal Cliff]

For example, someone who sold a piece of property for $450,000 this year may want to claim all of that income for 2012, even if all of that money is going to come in installments over the course of a few years. Paying taxes on that income now means avoiding next year's tax hikes, even if those hikes are not yet set in stone.

"I don't know what the rates are going to be next year, but the one thing I absolutely know is they won't be lower," says Ron Roberson, a CPA who teaches seminars with Hoven.

One area where those taxes are set to go up the most is in dividends. While income tax rates may increase by a few percentage points for any given bracket, tax rates on dividends for the highest earners are currently scheduled to jump from the current 15 percent to as high as 43.4 percent on January 1.

That makes some investments suddenly look much less attractive, meaning that accountants and their clients have to adjust what they have recently considered smart places to park their money.

The messiness doesn't end with April 15, 2013, Hoven points out. He says the healthcare reform act's employer mandate is perhaps the biggest area of uncertainty looming next year, as employers navigate the rules governing their responsibilities (not all of which have been firmly laid out). With the mandate going into full effect in 2014, Hoven is hoping that these uncertainties are ironed out sooner rather than later.

All of this ongoing confusion in the tax code, says Smith, turns a centuries-old adage on its head: "The only thing that's certain remaining is death, because we've taken certainty out of taxes completely," he says.

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  • Danielle Kurtzleben is a business and economics reporter for U.S. News & World Report. You can follow her on Twitter or reach her at dkurtzleben@usnews.com.