Middle Class Tax Cut Act of 2010
On Monday December 6th, 2010 the news was abuzz with talk of the agreement reached between Republican legislators and President Obama regarding tax relief. The Middle Class Tax Cut Act of 2010 was attacked by some Democrats as being too generous a compromise to the perceived Republican interest in preserving tax cuts for the wealthy. Just when we thought there was going to be some good news regarding upcoming tax increases, partisan politics threatens some widespread increases as many tax relief provisions from 2001 are allowed to expire.
Debate in the House of Representatives is ongoing and no one knows how many of the original provisions will survive to the next stage. We understand the budgetary concerns caused by these proposals but definitely love the idea of paying less tax the next couple years.
 The following are just a few that immediately caught our attention. ONCE AGAIN, WE MUST EMPHASIZE THIS IS NOT LAW YET. We normally don’t comment on tax legislation during these early phases but due to the widespread media coverage thought it would be useful to see the items that can effect you for the next two years.
Highlights of Middle Class Tax Cut Act
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Lower Tax Brackets for Everyone- This act makes permanent the 10% bracket and keeps most of the brackets enacted by the Bush Tax Cuts of 2001
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Lower Tax on Long Term Capital Gains and Dividends- This act extends the 0% tax on dividends and capital gains for taxpayers in the 25% or lower bracket and uses either a 15% or 20% rate for everyone else.
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Keeps the $1000 Child Tax Credit- This was scheduled to revert to $500 per child
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Alternative Minimum Tax Relief- this act extends the more favorable exemption amounts from the Bush Cuts of 2001 and temporarily fixes what is becoming a major tax planning headache. (AMT)
 We will keep you posted as this gets closer to finalization.