Email and ShareTax Reform: What Does It Mean to You in 2010?
The 2003 Tax Act contained many provisions that are being phased in over seven years. The following are some of the changes that could affect you now.
| 2010 PERSONAL INCOME TAX RATES | ||
| Rate | Joint | Single |
| 10% | $0 - $16,750 | $0 - $8,375 |
| 15% | $16,751 - $68,000 | $8,376 - $34,000 |
| 25% | $68,001 - $137,300 | $34,061 - $82,400 |
| 28% | $137,301- $209,250 | $82,401 - $171,850 |
| 33% | $209,251 - $373,650 | $171,851 - $373,650 |
| 35% | Over $373,651+ | Over $373,961+ |
2010 Personal Exemption $3,650
Standard Deductions $11,400 Joint $5,700 Single
GIFT AND ESTATE TAXES
Good news on several transfer tax-fronts: exemptions are unchanged and rates are down. Plus, you may make up to $1,000,000 of taxable transfers during your lifetime, or at your death, without any gift or estate tax. Effective in 2010 you can leave an unlimited amount in your estate, tax free for your heirs.* For couples, this also means you can leave any amount to your heirs with no estate tax, provided you have the proper estate plan. And, amounts left for charity are also estate-tax free.
In addition, the top estate/transfer tax rate in 2010 is 0%, but returns at a new higher rate of 55% in 2011. The “annual exclusion” from the gift tax is currently $13,000 per recipient. This allows each person to give an unlimited number of $13,000 gifts each year.
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ESTATE TAX RATES
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Tax Year
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Taxable Estate
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Tentative Estate Tax
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Marginal Rate on Excess
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2009
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$3,500,000
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$1,455,800
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0.45
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2010
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$0
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$0
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0.00
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2011
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$3,500,000
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$1,777,000
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0.55
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*Current legislation has the Estate Tax Exemption returning to 2003 levels in 2011; however, in December 2009, the House passed a permanent estate tax exemption of $3.5 million with a top tax rate of 45% (the 2009 levels). The Senate did not act on the legislation. As a result, the estate and Generation Skipping taxes were repealed on January 1, 2010. However, Senate Finance Chair Max Baucus hopes to pass an esate tax bill in 2010 that is retroactive to January 1, 2010. It is expected as a result of the earthquake in Haiti, Congress will move quickly to approve pending legislation including the estate tax bill.