Friday, December 17, 2010

The Tax Act of 2010 - What Does it Mean?

Well, it has some excellent features, which I "simplify" as follows:

First (at least from my perspective), it extends unemployment benefits for an additional 13 months. 

Second, it lowers contribution rates on social security contributions for everyone from 6.2% to 4.2% for 2011.  That means for people earning $106, 800 (which is where contribution obligations cease), you can "save" roughly $2,000.

Third, the Alternative Minimum Tax (often referred to as "the wealth tax") will be raised to $47,450 for individuals and $72,450 for couples filing jointly in 2010.  In 2011, those exemptions will increase even a little more.

Fourth, the top tax rate will remain at 35%, the lowest at 10%, and the rest will stay as they are (15%, 25%, 28%,  33%).

Finally, the Estate Tax - I think, as I understand it, the exemption level will be raised to $5 Million, and the maximum tax rate will be lowered to 35%.

In the coming days, I will add links to my Blog to some "simple" articles discussing each of the elements of the Bill discussed above.

This is not tax advice - see a qualified tax advisor for that!

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