Clifton Gunderson LLP - A nationwide firm of Certified Public Accountants and Consultants

Tax Relief Act of 2010 Has Something for Everyone

Posted December 17, 2010

Read the Full Newsletter

In this issue:

Nearly every individual taxpayer and every business in America can lay claim to some part of the Tax Relief and Job Creation Act of 2010, which was signed by the president on Dec. 17, 2010. After much debate and compromise, some key provisions include:

• Lower individual income tax rates have been extended for two years
• The 15 percent rate on dividends and capital gains is extended for two years
• Workers will pay less payroll tax in 2011
• The estate tax returns with a higher exemption level and lower rate
• Businesses can take 100 percent depreciation on certain 2010 and 2011 capital expenditures
• The R & D tax credit returns

While the debate over the economics of the more than $800 billion bill continues, most taxpayers welcome the certainty of knowing what's ahead.

Here is a brief look at highlights of the new law and some of its potential impact.

Individual Tax Relief

Individual Income Tax Rates Unchanged for Two More Years

Capital Gains and Dividend Rates Stay the Course

No Limits on Itemized Deductions

No Phase-out of Personal Exemptions

Marriage Penalty Relief Extended

Credit for Qualified Children Stays at $1,000

Earned Income Tax Credit

Continuing Relief for Job-Seeking Taxpayers

Two More Years of Credit for College Expenses

Credit Remains for Educational Assistance Exclusion

Another Patch for the Alternative Minimum Tax

A Cut in Payroll Taxes for all Workers

Estate Tax is Not as High as Feared

Business Tax Relief

Bonus Depreciation Jumps to 100 Percent

Section 179 Expensing Levels Extend into 2012

R & D Tax Credit Returns for Two Years

Employer-Provided Child Care Credit Extended