So, the analyst are yapping away on the news channels. Your friends and co-workers are complaining about it. What does the new tax bill really mean for you? Does it spell disaster. or will it even affect you at all? The following is the skinny on the basics of the new tax bill, read on and decide for yourself whether or not the tax bill affects you.
The new tax bill has extended the tax cuts established by George W. Bush. That means everyone, the highest and lowest earners. The six federal income tax rates stay the same. Plus, itemized deductions are still permissible.
The AMT, or alternative minimum tax is something many of us gloss over on our tax forms. However, more than 20 million tax payers won’t have to pay this tax, which is commonly referred to as the wealth tax. The bill raises the amount of income exempt from the AMT tax to $47,450 for an individual, and $72,450 for couples. The bill also calls for the income exempt to be raised again for the 2011 tax year to $48,450 for individuals and $74,450 for couples.
The American worker also gets a break with the new tax bill. Social security payroll tax will be 2 percent less for one year. The bill also extends the increase in the child tax credit and reduced-earnings threshold.
For the 2011 and 2012 tax year the estate tax will be reinstated. However, the bill calls for an increased exemption level of $5,000,000. The bill also calls for a lowered top rate of 33 percent. The bill also allows everyone to keep the low investment tax rate for the next two years.
Most notably, the bill actually mentions the unemployed. The tax bill allows the unemployed to get a 13 month extension. This guarantees 99 weeks of benefits