Tax Relief Act of 2010

The 'Tax Relief Act of 2010' was signed into law on December 17, 2010. The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 include multiple items that will affect your business's payroll, such as: • A one-year, 2 percent reduction in the employee portion of Social Security tax from the current 6.2 percent to 4.2 percent. • A two-year extension of the Bush tax rates currently in effect. President Obama's "Making Work Pay" provision is being dropped in favor of the 2 percent payroll tax holiday. Other non-payroll related items include: • A temporary, 13-month extension of unemployment benefits. • A 100 percent deduction for business capital improvements. • A two-year extension of current capital gains tax rates. • A two-year estate tax rate set at 35 percent with an exemption for estates valued at up to $5 million. • Extension of the Research and Development Tax Credit. • Another temporary fix for the Alternative Minimum Tax Most of its provisions of the Tax Relief Act are temporary, two-year fixes that impact 2011 and 2012 only. All of the Bush Tax Cuts that were scheduled to expire at the end of 2010 will now expire at the end of 2012. Visit the Taxes PhD website for more.