ALEXANDRIA, Va. (1/3/11)--In December, Congress passed and President Barach Obama signed the 2010 Tax Relief Act. The bill brings significant tax-law changes for many Americans. The National Society of Accountants (Dec. 20) breaks down some of the most important changes, including:
* Increased Alternative Minimum Tax exemption amounts. The act increases 2010 exemption amounts to $47,450 for individuals, $72,450 for married couples filing jointly and surviving spouses, and $36,225 for married couples filing separately. * No change in tax rates. Individual tax rates will be held at the 2010 level for the next two years. * Extended capital-gains tax rate. For 2010, qualified capital gains and dividends are taxed at a maximum rate of 15%. The act extends that rate through Dec. 31, 2012. * Extended itemized deduction limitation. The “Pease” limitation--which reduces the total amount of a higher-income individual’s otherwise allowable deductions--was suspended for 2010. It was scheduled to return at a projected level of income starting at $169,550. However, the act has extended the suspension through Dec. 31, 2012. * Suspension of personal exemption phaseout (PEP) extended. The PEP reduced the total amount of exemptions for taxpayers with adjusted gross incomes exceeding the applicable threshold--$169,550 for singles and $254,350 for joint filers in 2011. The PEP was suspended for 2010, and the act extends that suspension through Dec. 31, 2012. * Extended marriage penalty relief. The relief provision increased the basic standard deduction for married couples filing joint returns to twice the amount for a single taxpayer. The act extends marriage penalty relief through Dec. 31, 2012.
For more information about preparing for tax season, read “Your Tax Bracket Tells Just Part of the Story” and watch the “Getting Tax Records Organized” video in the Home & Family Finance Resource Center