On December 17, 2010, President Obama signed into law a two-year extension of the reduced individual income tax rates from the previous Bush Administration. This gives us much needed releif for the laws that were expiring. Here's how it impacts you:
Individual Taxes- Marraige penalty relief rate reduction is extended
- State and local sales tax deduction continues
- HOPE education credit extended and renamed to American Opportunity Tax Credit
- Self-employed continue to claim health insurance deduction
- Unemployment benefits exclusion: you may exclude $2400 of UE benefits
- Child tax credit remains at $1,000 per child for 2011 and 2012
- Capital gains and dividends will continue to be taxed at a max rate of 15%
- AMT liability is offset by their nonrefundable tax credits in 2010 and 2011
- Employee share of OASDI is reduced from 6.2% to 4.2% for wages paid in 2011
Estate Taxes- the maximum rate continues to be 35% until 2013, when it increases to 55%
- Gift Tax: 35% maximum
If you have any questions regarding these changes and any other Employer/Business related changes, please give us a call or e-mail us anytime!
Call soon for your tax appointment!