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Dear John,
On December 16, 2010, Congress passed the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010. President Obama signed the Bill on December 17th. This legislation, negotiated by the White House and select members of the House and Senate, provides for a short-term extension of tax cuts made in 2001. It also addresses the Alternative Minimum Tax (AMT) and Estate, Gift and Generation-skipping Transfer taxes.
Alliant Wealth Advisors has
prepared the following
highlights to provide you with
key information from the bill.
If you have any additional
questions, please do not
hesitate to contact us.
Two-year extension of all
current tax rates through 2012
• Rates remain 10, 25, 28,
33, and 35 percent
• 2-year extension of
reduced 0 or 15 percent rate for
capital gains & dividends
• 2-year continued repeal
of Personal Exemption Phase-out
(PEP) & itemized deduction
limitation (Pease)
Temporary modification of
Estate, Gift and
Generation-Skipping Transfer Tax
for 2010, 2011, 2012
• Reunification of estate
and gift taxes
• 35% top rate and $5
million exemption for estate,
gift and GST
• Alternatively, taxpayer
may choose modified carryover
basis for 2010
• Unused exemption may be
transferred to spouse
• Exemption amount indexed
for inflation in 2012
AMT Patch for 2010 and 2011
• Increases the exemption
amounts for 2010 to $47,450
($72,450 married filing jointly)
and for 2011 to $48,450 ($74,450
married filing jointly). It also
allows the nonrefundable
personal credits against the AMT.
Extension of “tax
extenders” for 2010 and
2011, including:
• Tax-free distributions of
up to $100,000 from individual
retirement plans for charitable
purposes
• Above-the-line deduction
for qualified tuition and
related expenses
• Expanded Coverdell
Accounts and definition of
education expenses
• American Opportunity Tax
Credit for tuition expenses of
up to $2,500
• Deduction of state and
local general sales taxes
• 30-percent credit for
energy-efficiency improvements
to the home (IRC section 25C)
• Exclusion of qualified
small business capital gains
(IRC§1202)
Temporary Employee Payroll Tax
Cut
• Provides a payroll
tax holiday during 2011 of two
percentage points. Employees
will pay only 4.2 percent on
wages and self-employed
individuals will pay only 10.4
percent on self-employment
income up to $106,800.
Best,
John A. Frisch, CPA/PFS, CFP
President & Founder
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About Us:
Located in Woodbridge, VA, Alliant Wealth
Advisors (formerly Millennium Capital Management
Corp) was founded to help a select group of
families achieve all that is important to them
financially. To achieve our mission we use a
consultative wealth management process, which
includes both investment consulting and advanced
planning. Our approach assumes that every client
is unique; every client has varying needs and
objectives; and no two clients share the same
risk tolerances, time horizons and dreams. In
addition to providing our expertise we work with
clients' existing advisors and, where there is a
gap to fill, we use our own outside experts in
the fields of tax, legal and high-end Insurance.
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