Cook Wealth Management Group

2010 Tax Act

After many, many months of speculation, legislation was passed in late December 2010, extending tax cuts for two more years. Below are a few of the significant extensions.

  • Federal tax rates will remain at 10%, 15%, 25%, 28%, 33%, and 35%.
  • The Personal Exemption Phase Out has been repealed.
  • Capital gain and dividend rates will remain at a 0% for taxpayers below the 25% tax bracket and at 15% for taxpayers in the 25% bracket and above.
  • The Child Tax Credit is extended, meaning qualifying taxpayers may still claim a $1,000 credit for each qualifying child.
  • The Limitation on Itemized Deductions has been repealed.
  • The Alternative Minimum Tax exemption has been increased for 2010 to $47,450 for individuals ($48,450 for 2011) and $72,450 for married filing jointly ($74,450 for 2011.)
  • Through 2010, the estate tax exemption has been increased to $5 million per person and $10 million per couple, with a top tax rate of 35% for the estate, gift, and generation-skipping transfer taxes.

To find out more about the new legislation on Tax Relief, Unemployment Insurance Reauthorization, and Job Creation, read more here.