Congress, in an eleventh-hour compromise agreement worked out with the Obama Administration and the GOP Leadership, has extended many of the Bush era tax reductions. The following is an overview of the more frequently encountered tax changes that will have an effect on just about every taxpayer. INDIVIDUAL PROVISIONS Individual Tax Rates – Under the Bush era tax cuts, the … [Read more...] about Congress Extends Tax Breaks – the details
Personal Tax
Did Congress Save You From the AMT in 2010?
Alternative Minimum Tax (AMT) – For several years, Congress has failed to permanently resolve the nagging issue of the AMT, and instead, each year has applied a one-year patch without which an estimated 28 million taxpayers would be hit with this punitive tax. This year, Congress took the AMT issue to the brink, but in the eleventh hour decided to patch it again, this time for … [Read more...] about Did Congress Save You From the AMT in 2010?
Federal Estate Tax Retroactively Reinstated
The Bush era tax cuts slowly phased out the federal estate tax and abolished it altogether for decedents dying in 2010, and replaced it with a rather complicated modified carryover basis regime. Just about everyone assumed Congress would reinstate the estate tax for 2010. As the year wore on, opinions began to change to where just about everyone predicted Congress would not … [Read more...] about Federal Estate Tax Retroactively Reinstated
Is it Best to Maximize or Minimize Deductions?
As the end of the year approaches, it’s a good time to review your potential tax deductions and develop a strategy that maximizes the benefits. Most taxpayers may deduct the higher of two amounts from adjusted gross income when figuring their taxable income. These amounts are either a fixed amount set by law (the “standard deduction”) or a listing of the expenses the taxpayer … [Read more...] about Is it Best to Maximize or Minimize Deductions?
Bonus Credit for Retirement Savings Contributions
Generally, taxpayers with lower incomes do not have sufficient financial resources to make retirement savings contributions, often leading to inadequate resources when it comes time to retire in the future. Recognizing this problem, Congress added the Retirement Savings Contributions Credit (Savers Credit) to the tax code a few years back. What this means is that lower-income … [Read more...] about Bonus Credit for Retirement Savings Contributions