Monday, February 22, 2010

Estate Tax, part 5

Basically, there is nothing new yet on this. Republicans in the Senate want to raise the exemption to $5 million and lower the tax rate to 35%. Maybe they will get to work on this after they finish the work they are doing now on other taxes (see previous post).

Tax changes

The Senate just passed a bill that contains some tax reductions. The headline items are mainly for small businesses. One provision calls for a tax break for businesses that hire new people during 2010. Restoring the expanded write-offs for purchases of new equipment is also part of the bill.
There were a number of tax breaks that expired at the end of 2009. Most of these are being restored in this new tax bill. For example, the option to distribute money from an IRA directly to a charity without paying tax on the distribution--an option that expired this year--is to be restored. Credits for college tuition--valid in 2009 but dead so far in 2010--are also targeted for revival. The House will still have to act on the bill to make it law.