A jumpy stock market has kept investors on their toes this year. Uncertainty about the future of tax rates on capital gains and dividends makes planning all the more complicated. Here's a look at some of the issues investors are up against as they look for ways to minimize their tax burden.

Will Rates Increase?

Under current law, qualified dividends and most long-term capital gains are taxed at a maximum rate of 15%.* After 2010, the capital gains rate goes up, generally to 20%, and dividends no longer qualify for favorable treatment.

That's the situation as it stands now. Absent a law change, the rate increase will take place as scheduled. However, there’s no shortage of speculation about what might happen. Some observers are predicting that lawmakers will tinker with the current scheme before 2011. And that leaves the future of today's rates an open question for investors.

Sell or Hold?

Taxes should never be the overriding reason for an investment decision. That said, investors may want to review investments held in taxable accounts. Only long-term capital gains - generally, gains on investments held for more than one year - are eligible for the lower tax rate. Investors who are expecting tax increases may want to look for opportunities to lock in unrealized gains by selling appreciated investments they've held for more than one year.

Investments showing paper losses are another story. From a tax viewpoint, short-term capital losses can be quite valuable. Why? Investors can use short-term losses to offset short-term capital gains that otherwise would be subject to tax at ordinary rates.

* Under current law, long-term capital gains and qualified dividends that would otherwise be taxed at a regular rate of 15% or lower are not subject to tax through 2010.