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2010-2011
TAX YEAR CHANGES |
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On December 17
the Tax Relief, Unemployment Insurance Reauthorization, and
Job Creation Act of 2010 (the 2010 Tax Relief Act) was
signed into law. It includes a host of retroactively
resuscitated and extended tax breaks for individuals and
businesses. Click
here for
a look at certain key provisions that may affect
your tax situation.
Investors
have more opportunities to save for their retirement and
for a child's education due to recent legislative changes. Below
are some highlights, however are subject to change due to
ongoing legislative actions:
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| Traditional IRAs and Roth IRAs |
- Contributions to Traditional IRA and Roth IRA
remain at $5,000 for 2010 and 2011, and "catch-up" for investors
age 50 and over remains at $1,000; so those over 50 can contribute
$6,000.
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| 401(k)s and 403(b)s |
- 401k and 403b contributions
remain at $16,500 for 2010 and 2011, and catch-up for investors age 50 and over
increases to $5,500. In 2010 and 2011, those over 50 can
contribute $22,000.
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| SEP Plans |
- Contributions to a SEP Plan
remain at
$49,000 for 2010 and 2011.
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| SIMPLE Plans |
- Contributions to a SIMPLE Plan
remain at
$11,500. Catch-up provisions for investors age 50 and over
remains at $2,500. In 2010 and 2011, those over 50 can
contribute $14,000.
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| HSAs
Accounts |
- Health savings
accounts (HSAs) allow taxpayers with high-deductible
health insurance to set aside pretax dollars that can be
withdrawn tax-free for medical expenses.
- 2010 and 2011 Contribution limits
are $3,050 (Single) and $6,150 (Family). Additional
contributions of $1,000 for 55 & older.
- You can make contributions
to your Health Savings Account for 2010 until April 15,
2011.
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| Education
IRAs (Coverdell Education Savings Accounts) |
- The maximum annual pre-tax contribution
remains at $2,000.
- Savings may be used for primary and secondary school
expenses, in addition to higher education fees.
- The income eligibility limits increased for joint
filers. The phase-out range is $190,000-$220,000.
- Contribution deadline for
2010 is April 15, 2011.
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| Miscellaneous |
- Standard Mileage Allowance:
- Business - $.51 per mile
(2011), $.50 per mile (2010).
- Medical/Moving - $.19
per mile (2011), $.165 per mile (2010).
- Charitable activities
- $.14 per mile (2010 and 2011).
- Section 179 Deduction -
$500,000 (2010 and 2011).
- Purchase limit -
$2,000,000.
- Top Estate Tax Rate - 35%
(2010 and 2011).
- Estate Tax Exemption -
$5,000,000.
- Nanny tax threshold -
$1,700.
- Tax brackets, personal
exemptions, and many other tax numbers increase due to
required annual inflation adjustments.
- These are just a few of
the many tax law changes, please contact us for other items.
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