Tax Deal Details

Note: The following was passed by congress and signed by the President in December.

Income Tax
-All the Bush tax cuts remain at all levels for two years.

Including:
-The child credit
-Adoption credit
-Dependent care credit
-Education credits
-Child tax credit (more refundable)
-Earned income tax credit.

-AMT is patched for 2010 and 2011.

Capital Gains and Dividends
-Retain 15% rate for two years (as well as the rate structure for lower income).

Estate and Gift through 2012
-$5 million dollar credit amount indexed for inflation ($10 million per couple) and 35% rates.

-Unification of the estate and gift tax exemption amounts at $5 million. In 2009 the credit amount was $3.5 million and the gift amount $1 million.

-The unused portion of the $5 million exempt amount can be transferred and used by the surviving spouse.

Expensing
Expensing the full cost of all capital investments made during 2011.

Payroll holiday
2011 Employee share is cut from 6.2 percent to 4.2 percent.

Temporary extension of unemployment insurance

Individual extenders for 2011
-Deduction of state and local general sales taxes
-Teachers’ classroom expenses
-Deduction for qualified tuition

Charitable giving extenders
-Taxpayers 70 ½ and older may elect to have a tax-free distribution from an IRA to public charities made in January 2011 count against their 2010 $100,000 limit and satisfy their 2010 minimum distribution requirement for an IRA.

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