Join us for a Webinar on December 28
7:00pm CST
(5:00pm PST/6:00pm MST/8:00pm EST)
Larry Kopsa CPA will take you through the synopsis of the various components that are in the new tax laws. December 31st is right around the corner and you may need to readjust your year-end tax planning because of these new laws. As always Kopsa Otte is here to keep you informed!
Reserve Your Webinar Seat Now at:
https://www1.gotomeeting.com/register/245365497
Here’s a list of the items Larry will be covering:
Federal Estate Tax. 35% – the lowest since 1931 – with estates over $5 million per person. It’s effectively a repeal for most Americans since, with a little bit of decent estate planning, a married couple can pass $10 million to their heirs without being subject to the tax.
Individual Income Tax Rates. The same rates created as 2010. We have avoided a 3% hike – for a family making $50,000 that means you’ve avoided a $1,500 bump in tax for 2011.
Alternative Minimum Tax (AMT). We got our patch for two years. No word on 2012 and beyond.
Capital Gains Rates. Top rate for long-term gains stays at 15%.
Dividends. Same story as on capital gains rates: current rates are extended.
Payroll Tax “Holiday.” It’s a one year (just one, not two like much of the other provisions) cut in Social Security taxes for workers. For 2011, you’ll pay in 4.2% on the first $106,800 of wages rather than 6.2%. That means a 2% cut so that a worker earning $50,000 would pay $1,000 less in 2011. But only for 2011.
Child Tax Credit. The child tax credit had been bumped under Bush to $1,000 per child with a $3,000 earned income floor to make it refundable. That will stand for the next two years.
Earned Income Tax Credit (EITC). The EITC is probably the most controversial of the tax credits. It cost taxpayers $42.9 billion in 2008. The EITC base remains the same as for 2010.
American Opportunity Tax Credit (AOTC). The modified version of the Hope Credit allowed a slightly bigger credit ($2,500 versus $1,800) for students pursuing a degree.
State and Local Sales Tax Deduction. The option to deduct sales and local sales taxes on your federal income tax return – even if you don’t itemize – ended in 2009 has been reinstated for 2010 and 2011.
Transfers of IRAs to Charities. The option to allow those taxpayers over the age of 70-1/2 to roll their IRAs directly to charity.
So that’s the summary of what’s in the tax deal. The regulations are not yet out. More information as it becomes available.
