New Tax Law: What Does It Means To You?
As of December 17, 2010 President Obama officially extended tax cuts and ensured
the average American will pay about $2,000 less in taxes for the next two years.
The tax cut extension means big bucks for the extremely wealthy. For instance a family making $100,000 per year will pay about $6,000 less in taxes. The average savings for all Americans is around $2,800.
What does the Tax Cutting Deal mean for Families, Workers and Employers?
Families:
All Bush-era taxes will be extended for two more years for all American families including the wealthy.
Obama wanted to limit the extension of the Bush tax rates to households making less than $250,000 while Republican lawmakers wanted a permanent extension for all taxpayers, including the wealthy.
Impact:
This deal means families making between $40,000 & $50,000 will pay around $1,600 less in taxes per year than if the tax cuts had expired.
The average U.S. Household, with an income of $49,777, will continue to keep its tax cut of $2,142.
A family making $311,330, will keep $9,318 as opposed to the $8,012 if the president had had his way.
Workers:
13-month extension of unemployment benefits. The extension is expected to help about 9 million American people.
One-year Social Security tax reduction for employees, from 6.2 percent to 4.2 percent for individuals.
Impact:
For instance, a worker who makes $40,000 annually would pay $800 less in Social Security taxes and a worker who earns $70,000 would pay $1,400 less.
Child Tax Credit, Earned Income Tax Credit & the tax credit increases for college tuition (American Opportunity Credit), will also be extended.
Impact
Families will be allowed to get up to $2,500 per student for tuition credit.
About 22 million families will be exempt from the Alternative Minimum tax next year.
by: Sandi Lattin
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