You just got a raise!
Who wants to make an extra $20!? American workers may notice a small increase in take home pay starting in January 2011. Ã‚ The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 was signed into law December 17, 2010. In addition to some extensions of tax breaks from the 2001 legislation by the Bush administration, there is a payroll tax “holiday” included that reduces social security taxes withheld from employees by 2%. That works out to $20 for every $1000 of earnings. The hope is this small windfall results in spending and subsequent growth in corporate tax collections.
You may remember previously the Middle Class Tax Relief Act of 2010 passed providing some widespread help for taxpayers. Ã‚ That was certainly good news but this is even better. The latest act extends a number of tax cuts passed in 2001 that were scheduled to sunset at the end of 2010 for two more years.
 Some other key relief measures include:
- Individual income tax rates remain at Bush Era Rates between 10% and 35%
- Alternative Minimum Tax relief
- Mortgage Insurance is still deductible in addition to interest and property taxes on your home
- Teachers still get an “above the line” deduction for a portion of money spent on classroom supplies
- Maintains child tax credit at $1000 per qualifying dependent
There is much more to this act then we have time to discuss in this weeks blog. Please call our office to discuss this in more detail. Tax organizers will be sent out later this week and early next week and will have questions designed to determine which of the extended or new tax provisions may help you.
We have a 2010 summary of all tax changes available upon request. Post a message below with your e-mail address and someone will send it to your inbox right away.