Changes in Federal Tax Laws Affecting Individuals, Businesses, and Estates
The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010, signed into law by the President on December 17, 2010, made some important changes in Federal tax law, including extensions of several past provisions. The following report outlines these major changes. Background is included on previous tax treatment in each area to put the changes in perspective. The report is organized in four parts:
Part 1. Introduction and References
An overview of the major provisions of the new tax law.
Part 2. Changes Affecting Individuals
Tax rate changes, capital gains taxes, social security rates, and AMT exemptions.
Part 3. Changes Affecting Businesses
Investment incentives, deductions for health insurance and employee benefits.
Part 4. Changes Affecting Estates
Federal estate tax rates, exemption changes, and stepped-up basis.
Other Federal Income References
- Congress repealed the 1099 reporting requirements added in 2010. See the news release “Recently added 1099 reporting requirements repealed.”
- Self-employed taxpayers can deduct health insurance expenses for purposes of calculating Social Security and Medicare taxes on 2010 returns. For more information and an example, go to http://ruraltax.org/htm/se-tax.
- How does the IRS guidelines for determining whether a farming operation is a business or hobby? Here are the guidelines: Go to: http://www.aces.edu/timelyinfo/Ag&NatResEcon/2011/February/feb-11-11.pdf
- Here is an overview of depreciation and expensing options available to agricultural producers and farm businesses. http://ruraltax.org/files/uploads/Depreciation%20and%20Expensing%20Options%20for%20Farmers%20(RTE%202011-24).pdf
- This publication from the IRS was prepared before the 2010 Tax Relief Act was enacted, but provides an excellent overview of income tax provisions relevant to agricultural producers. Farmer’s Tax Guide, Publication 225
- This website provides farmers and ranchers with important tax information that is current and easy to understand. http://www.ruraltax.org/
- For information about the Tax Practitioner Workshops offered annually across Texas, go to: http://www.taxworkshop.com/index.php
Tax Education programs:
- The Land Grant University Tax Education Foundation, Inc.: http://www.taxworkbook.com/
- University of Illinois Tax School: http://www.taxschool.illinois.edu/index.html
Disclaimer: Federal income tax law and regulations are subject to change. This information is provided for educational purposes only. For the most recent interpretations and advice, contact the IRS or a tax professional.