e-YWM Alert #9 - Framework for Bipartisan Tax Agreement
Late on Dec. 6, President Obama announced that the Administration and the Republicans had arrived at a "framework for a bipartisan agreement" that would extend the Bush-era tax cuts and give workers a 2% reduction in Social Security tax for 2011. The President held a news conference yesterday to defend his decision to compromise with Republicans but it is uncertain at this time how the agreement will be received by Congressional Democrats. Although details of the agreement have yet to be released, its major components, as described in a Fact Sheet released by the White House, are as follows:
• The EGTRRA/JGTRRA income tax rates would be retained for two years for everyone. Presumably, current law's favorable tax treatment of long-term capital gains and qualified dividend income would be retained as well.
• A two year alternative minimum tax (AMT) "patch," which would prevent exemption amounts for individuals from dropping and allow personal credits to offset AMT.
• Retention of "key tax cuts" for working families (earned income tax credit, child tax credit, American Opportunity Tax Credit).
• Allowing businesses to write off 100% of their equipment and machinery purchases during 2011.
• A two-year extension of the R&D tax credit and other tax incentives to support business expansion. (It is not clear at this point whether the bipartisan agreement will extend all of the business and individual tax breaks that expired at the end of 2009.)
• Reducing the workers' share of Social Security tax for 2011 from 6.20% to 4.20%.
• Extending unemployment benefits for 13 months.
Reportedly, the bipartisan agreement also would reinstate the estate tax with a $5 million exemption amount and a 35% top tax rate.
The"Fact Sheet on the Framework Agreement on Middle Class Tax Cuts and Unemployment Insurance: A Win for Our Economy, Jobs, and Working Families," released by the White House on Dec. 7, 2010 can be viewed by clicking this at http://www.whitehouse.gov/the-press-office/2010/12/07/fact-sheet-framework-agreement-middle-class-tax-cuts-and-unemployment-in
All information presented above is generic, if you would like to know how this may be applied to your specific situation please give us a call at 303-792-3020 or reply directly to this email. Additional resources are always available at our website, www.ywmcpa.com.
Subscribe to:
Post Comments (Atom)
Disclaimer
The information contained in this website is for general information purposes only. The information is provided by Yanari Watson McGaughey P.C. and while we endeavour to keep the information up to date and correct, we make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability or availability with respect to the website or the information, products, services, or related graphics contained on the website for any purpose. Any reliance you place on such information is therefore strictly at your own risk.
In no event will we be liable for any loss or damage including without limitation, indirect or consequential loss or damage, or any loss or damage whatsoever arising from loss of data or profits arising out of, or in connection with, the use of this website.
Through this website you are able to link to other websites which are not under the control of Yanari Watson McGaughey P.C. We have no control over the nature, content and availability of those sites. The inclusion of any links does not necessarily imply a recommendation or endorse the views expressed within them.
UNLESS EXPRESSLY STATED OTHERWISE, IN WRITING, THIS CORRESPONDENCE, INCLUDING ANY ATTACHMENTS HERETO, IS NOT INTENDED TO OR WRITTEN TO BE USED AND CANNOT BE USED BY ANY TAXPAYER FOR THE PURPOSE OF AVOIDING PENALTIES ASSERTED BY THE INTERNAL REVENUE SERVICE OR SANCTIONS PROPOSED BY THE DIRECTOR OF THE OFFICE OF PROFESSIONAL RESPONSIBILITY UNDER THE UNITED STATES TAX LAWS (THE FOREGOING STATEMENT IS MADE IN ACCORDANCE WITH CIRCULAR 230, 31 C.F.R. PART 10).
Free Counters
No comments:
Post a Comment