At the beginning of this year, President Obama signed into law the Taxpayer Relief Act of 2012. Among other things, it increases the top marginal tax rates for ordinary income, capital gains, and dividends. In the following video, Fool contributor John Maxfield shares two simple and legal ways that taxpayers can go about reducing their taxable income in order to (hopefully) steer clear from these new rates. He also discusses how the legislation could have an unintended consequence on shares of IBM (IBM -1.04%) and Caterpillar (CAT 0.59%), two of the sturdiest stocks on the Dow Jones Industrial Average.
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2 Simple Ways to Lower Your Income Taxes
Recent changes to federal tax law make lowering your taxable income particularly important this year. Here are two simple and legal ways that taxpayers can go about doing so.
John Maxfield has no position in any stocks mentioned. The Motley Fool owns shares of IBM. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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