Your Cheat Sheet to the New Tax Bill
The Bush Tax-Cuts will be extended for two years, long-term unemployment benefits will be extended for 13 weeks, and Social Security payroll taxes will be cut for one year.
Here’s your Cheat Sheet to the new tax deal:
Total Cost and Economic Benefits
The value of the tax package will cost the Federal government $858 billion over the next decade. However, no one yet knows the economic benefits of the incentives.
Unemployment Benefits Extension
Long-term unemployment benefits have been extended for another 13 weeks. This means if someone has not already used their 99 weeks worth, they have 13 extra weeks to qualify for the subsidy.
Marginal tax rates were set to rise on January 1st. Not any longer. Now, marginal tax rates will remain the same.
Capital Gains and Dividends
Long-term capital gains and dividends will continue to be taxed at the same rate of 15%, and 0% for those in the 10 and 15% tax brackets.
Social Security Payroll Tax Cut
In 2011, Social Security taxes for workers will be cut nearly 32.25% from 6.2% to 4.2%.
The estate tax will allow the first $10 million of a couple’s estate ($5 million for an individual) to pass to heirs without taxation. The remainder will be subject to a 35% tax rate.
Alternative Minimum Tax
Exemptions will increase slightly, but the general fix remains through 2011.
Child Tax Credit
$1,000 per child tax credit remains through 2012.
These are the major provisions. You can get all the details in the actual bill H.R. 4853.
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