Investors may consider cashing in some stock, both winners and losers, sooner rather than later. Capital losses can be applied to offset capital gains. Lacking gains, or if losses amount to more, up to $3,000 of a capital loss can be used to offset ordinary income. Additional losses can be carried forward to future years. At the very least, the wealthy can gain some interest on money before it's surrendering to Uncle Sam.
Tax-exempt municipal bonds are worthy of consideration as they're not affected by the new Medicare tax. Still, they tend to yield less than corporate debt, which isn't tax-free.
Henry Paula, a tax principal at
in Charlotte, N.C., suggests taxpayers consider taking less in wages in return for more distributions of each year's taxable income. Increasingly, executives have struck agreements that allow them to defer a portion of their compensation -- basic income as well as bonuses -- to a later date, up to and including retirement. Such a strategy may not ultimately pay off, but could offer relief as tax brackets and laws change over time. Conversely, bonuses may be paid out prior to 2013 to escape higher taxes.
Paula also suggests workers max out their 401(k) and other qualified retirement plans.
"Stuff as much as possible into your tax deferred accounts and manage them," he says. "It is just that simple."
In addition to traditional tax benefits, retirement plans -- including IRAs and Roth IRAs -- will be subject to the additional Medicare tax.
This may make this year's introduction of new Roth IRA conversion rules even more of a boon to high-income individuals. Roth IRAs, unlike traditional IRAs, aren't tax-deferred but do have tax-free withdrawals. Starting this year, the $100,000 income cap on converting to a Roth has been lifted, giving wealthier individuals their first, and only, opportunity to take advantage of the plans.
Boggs is clear on one tax strategy to steer clear of -- not reporting all income or avoiding efforts to collect what is owed.
"You can stick your head in the sand, but the IRS owns the beach," he says.