Bush Tax Cuts due to Expire in 2010.
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Since December 31, 2010 is the date that the Bush tax cuts expire, I’m sure there will be
a lot of debate in Congress this year over all of these. Here’s what we’re looking at:
Tax Cuts Expiring in 2010
1. Tax Rates. The top tax rate will go from 35% to 39.6%. In addition, if nothing is done, it
will mean higher taxes across the board. See the proposed 2011 tax rates for more
information.
2. Capital Gains. The 0% long term capital gains rate will go away. Capital gains rates
will go up to 10% for lower tax brackets and from 15% to 20% for higher tax brackets.
3. Dividends. Dividends will be taxed as ordinary income, with the new higher rates.
Right now the dividend tax rates are 10% and 15%.
4. Child Tax Credit. The child tax credit will return to $500 from the current $1,000 per
child. In addition, it may not be refundable for some taxpayers.
5. 529 Plans. 529 plan withdrawals will not be allowed tax free for computer or Internet
access.
6. Business Taxes. In addition, various business taxes will change including the payroll
tax credit and section 179 expense deduction.
7. Estate Taxes. Without any action, the estate tax (or death tax as some like to call it)
exemption will go back to a $1 million exemption.
8. Other Tax Credits. The tuition credits will be limited, as will the earned income tax
credit.
9. Mortgage Premiums. You will no longer be able to deduct mortgage insurance
premiums after December 31, 2010.
a lot of debate in Congress this year over all of these. Here’s what we’re looking at:
Tax Cuts Expiring in 2010
1. Tax Rates. The top tax rate will go from 35% to 39.6%. In addition, if nothing is done, it
will mean higher taxes across the board. See the proposed 2011 tax rates for more
information.
2. Capital Gains. The 0% long term capital gains rate will go away. Capital gains rates
will go up to 10% for lower tax brackets and from 15% to 20% for higher tax brackets.
3. Dividends. Dividends will be taxed as ordinary income, with the new higher rates.
Right now the dividend tax rates are 10% and 15%.
4. Child Tax Credit. The child tax credit will return to $500 from the current $1,000 per
child. In addition, it may not be refundable for some taxpayers.
5. 529 Plans. 529 plan withdrawals will not be allowed tax free for computer or Internet
access.
6. Business Taxes. In addition, various business taxes will change including the payroll
tax credit and section 179 expense deduction.
7. Estate Taxes. Without any action, the estate tax (or death tax as some like to call it)
exemption will go back to a $1 million exemption.
8. Other Tax Credits. The tuition credits will be limited, as will the earned income tax
credit.
9. Mortgage Premiums. You will no longer be able to deduct mortgage insurance
premiums after December 31, 2010.
