The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 no really that’s what it is called, I am serious!  LOL!

Here’s a brief list of the provisions affecting individuals:

1.   Education tax benefits are extended through 2012.

• American Opportunity Credit (AOC)! Hurray! The AOC is a partially-refundable credit up to $2,500 for the first-four years of college it expanded the existing Hope Credit.

• Student loan interest deduction. Some taxpayers are eligible to deduct up to $2,500 of qualified interest.

2. The deductibility of mortgage insurance premiums is extended through 2011.

3.   The AMT patch is extended for two years through 2011.

• Higher AMT exemption amounts for 2010 ($47,450 for S and HH filers, $72,450 for MFJ filers) and 2011 ($48,450 for S and HH filers, $74,450 for MFJ filers) are extended. Higher AMT exemptions result in fewer taxpayers paying AMT.

• The patch extension also allows certain nonrefundable personal tax credits for AMT. These include the dependent care credit, the non-business energy property credit, and the lifetime learning credit.

• The credit for energy-saving home improvements, such as windows, insulation, and furnaces.

4. Individual tax rates in effect for 2010 are extended through 2012.

• Tax rates (10%, 15%, 25%, 28%, 33%, and 35%) are extended through 2012 for all taxpayers regardless of income.

5.   Capital gain and qualified dividend rates in effect for 2010 are extended through 2012.

6.  The 2010 repeal of the phaseouts on itemized deductions and personal exemptions for higher-income taxpayers is extended through 2012.

7.   Marriage penalty relief provisions for joint filers are extended through 2012.

• Marriage penalty relief, which has been extended for two years, helps married taxpayers filing joint returns avoid paying higher taxes than they would pay if they were single filers.

8.   Enhanced child tax credit (CTC) provision is extended through 2012.

• The maximum CTC per qualified child will remain at the 2010 level of $1,000.

9.  Yippee!! Enhanced earned income tax credit (EITC) provisions are extended through 2012. Yes, if eligible you can claim a 3rd dependent for EITC.

10. The non-business energy property credit is extended through 2011.

11.  Several small “extenders” are extended for two years through 2011. These include:

• Tuition and fees deduction

• State and local sales tax deduction

• Educator’s expense deduction

• Qualified charitable distributions from IRAs

12.  Payroll tax holiday – a reduction in the employee-only portion of social security tax.

• The employee portion only of social security tax, 6.2% of the first $106,800 in 2010, would be reduced to 4.2% of the first $106,800 in 2011.

13. The estate tax is reinstated and modified through 2012. This doesn’t really apply to most tax payers but I thought that you should know about it!

· The max estate tax rate is 35% with an exemption of $5 million that is indexed to inflation.

Questions? Give me a call or shoot me an email @ ask the Heiress!


Buffie the Tax Heiress