Many people will experience significantly higher income taxes in 2013 than in recent years. A number of factors will contribute to increased income tax liabilities including: i) the increase in the maximum marginal rate from 35% to 39.6%; ii) the increase in the income tax rate imposed on long-term capital gains and qualified dividends from 15% to 20%; iii) the imposition of the new tax on net investment income of 3.8%; iv) the .9% increase in the Medicare tax imposed on wages and net income from self-employment from 2.9% to 3.8%; and v) the return to the law of the scaling back of allowable itemized deductions after adjusted gross income exceeds certain threshold amounts.

This year is a particularly important year for you to work with your tax advisors to develop a projection of your taxable income so that you can be sure you have made sufficient estimated tax payments to avoid underpayment penalties.