Tax Brackets

• The 2010 tax brackets are extended through 2012.
• The 10 percent, 25 percent, 28 percent, 33 percent, and 35 percent brackets will remain through the end of 2012.
• Treat this as a tax break!  If you're not maxing your 401(k) or putting money in savings, add the 4 percent that you're saving in taxes to your emergency fund or your 401(k).  

Personal Exemptions and Itemized Deductions

• The rules that phase out Personal Exemptions and Itemized Deductions because of income are gone through 2012.  

Extending capital gains and dividend rates

• Capital gains and dividend rates will stay at 10 percent or 15 percent, depending on your income, through 2012.
• If you're in the 10 percent bracket, you will pay zero percent capital gains, and dividends will continue to be taxed at the lower dividend tax rate -- a savings for investors with money outside their 401(k)s.
• This is the perfect reason to keep dividend-paying stocks in your taxable investment accounts rather than your IRA.  

Payroll Taxes

• With a temporary reduction in employee-paid payroll taxes, your take-home pay will increase by 2 percent.
• If  you are not already maxing out your 401(k), this is the perfect opportunity to increase your 401(k) contributions by 2 percent.
• If you are maxing out your 401(k), then increase the amount that you're putting into savings by 2 percent.

Student Loans

• The student loan interest above-the-line deduction will continue through 2012.
• This deduction is for interest expenses up to $2,500.
• There is a phase out for taxpayers with incomes between $55,000 and $70,000 or $110,000 and $140,000 for joint filers.
• The temporary expansion eliminates the 60-month limit on the deduction. 

Tuition Expenses

• The bill also extends for two years the above-the-line deduction for qualified tuition and related expenses.
• If you have a student in school, you can continue to deduct up to $2,500 for qualified tuition and related expenses (see Publication 970 for details). 

Alternative Minimum Tax

• The relief patch is now renewed for two years.
• The proposal increases the exemption amounts for 2010 to $47,550 per individual and $72,450 for married filing jointly.
• Then in 2011, it increases slightly to $48,450 per individual and $74,450 for those married filing jointly. 

Estate Tax

• The temporary estate relief in the bill means that for federal tax returns, the exemption per person is $5 million.
• The top tax rate for estate, gift, and generation-skipping transfer taxes for the next two years will be 35 percent.
• Click here to check on your state's taxes.  

Unemployment Benefits

• Benefits will be continuing for one year.
• So, even if you think you've phased out of your unemployment, you should check back with the Department of Employment Insurance to see whether or not you're eligible for more benefits.  

Adoption Tax Credit

• An extension of the increased adoption tax credit through 2012 means that the EGTRRA increased the credit for qualifying adoption expenses from $5,000 to $10,000.
• Also, employer assistance of up to $10,000 can be excluded from income. 

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