Tax Extension Passed
The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 was signed into law on December 17, 2010 by President Obama. Now we must sort through this law to see how it will impact each individual taxpayer. An overview of the changes shows that the Bush tax rates will be extended for two years through 2012. Additionally, there was a 2% reduction to the social security tax withholding for calendar year 2011 and unemployment benefits have once again been extended as part of the negotiated changes to the tax law. On the Estate tax front, there have been significant changes to the federal Estate Tax rules. With the passage of this tax law, federal estate tax exemptions will rise to $5 million for each taxpayer. This means that a husband and wife can transfer up to $10 million of assets without a federal tax. Keep in mind though that many states do have a transfer tax. Additionally, they have increased the gift tax exemption to $5 million as well.
Be sure to consult your tax preparer and estate tax advisor before making any changes to your current situation. And, return here to find additional tax tips as I continue to glean through the new law and update this blog.
