After much speculation and anticipation, Congress finally passed the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 (“the Act”). President Obama signed it into law on December 17, 2010. The Act, in essence, is an extension of the 2001/2003 Bush-era two year tax cut plan. Also, the Act provides a payroll tax holiday for 2011 and a change in the exemption amount and maximum tax rate for estate taxation. The Act extends and modifies many of the provisions first enacted in the 2009 American Recovery and Relief Act. Finally, the Act incorporates many individual extensions of the so-called “annual extenders”. The following is a list of individual provisions that will certainly affect your tax liability for 2011, 2012, and possibly 2010, as well.
A summary of the provisions of the new Act is presented under our newsletter heading. In addition, we offer a discussion of the opportunities and pitfalls that it presents for your personal tax planning.