Tax Cut Package Passed By Congress: See The Bill’s Highlights

As reported in Huffington Post 12/17/10

The Associated Press | 12/17/10 04:03 AM |

//

Get Business Alerts

Highlights of the tax package passed by Congress late Thursday and sent to President Barack Obama. It would cost about $858 billion; most provisions, which were to expire Jan. 1, would be extended for two years, unless noted.

The package extends:

_Lower rates for taxpayers at every income level. The top rate, on taxable income above $379,150, would stay at 35 percent, instead of increasing to 39.6 percent. The bottom rate, on taxable income below $8,500 for individuals and $17,000 for married couples, would stay at 10 percent, instead of increasing to 15 percent. Cost: $186.8 billion.

_More generous itemized deductions for high-income households. Cost: $20.7 billion.

_A more generous $1,000 child tax credit. Cost: $71.7 billion.

_Marriage penalty relief, increasing the standard deduction for married couples. Cost: $18 billion.

_A more generous Earned Income Tax Credit for low-income families. Cost: $15.7 billion.

_A series of tax breaks for students and their families, including interest deduction for student loans and an exemption for employer-provided educational assistance. Cost: $3.3 billion.

_A deduction for tuition and related expenses for higher education, for 2010 and 2011. Cost: $1.2 billion.

Story continues below

Advertisement

// <![CDATA[
document.write('');
document.write('

http://www.huffingtonpost.com/ads/ads_iframe.html#huffpost.business/longpost;business=1;politics=1;entry_id=798099;biggest-tax-breaks=1;capital-gains=1;child-tax-credit=1;dividend-taxes=1;marriage-penalty-relief=1;middle-class-tax-cuts=1;obama-tax-cuts=1;obama-tax-cuts-2010=1;tax-code=1;tax-cut-package=1;tax-cuts-2011=1;global=1;'+HPAds.ads_client_side_qvs()+';'+HPAds.ads_client_info()+';load_mode=inline;page_type=bpage;pos=mid_article;hot=tw;u=300×250|bpage|mid_article|biggest-tax-breaks,capital-gains,child-tax-credit,dividend-taxes,marriage-penalty-relief,middle-class-tax-cuts,obama-tax-cuts,obama-tax-cuts-2010,tax-code,tax-cut-package,tax-cuts-2011|tw|'+HPAds.ads_u_value()+'|798099||;sz=300×250;tile=3;ord=2964126119?‘);
var debugadcode = ”;
debugadcode = debugadcode.replace(/\’ \+ HPAds.ads_client_side_qvs\(\) \+ \’;/gi,HPAds.ads_client_side_qvs());
document.write(debugadcode);
// ]]>

//

_A tax credit of up to $2,500 for students’ higher education expenses. Cost: $17.6 billion.

_The top capital gains tax rate of 15 percent. Cost: $25.9 billion.

_The top tax rate on dividends of 15 percent. Cost: $27.3 billion.

_Through 2011, enhanced jobless benefits for people who have been unemployed for long stretches. Cost: $56.5 billion.

_A series of incentives for selling, using and producing alternative fuels, including ethanol. Many of the provisions expired at the end of 2009. They would be extended through 2011. Cost: $11.3 billion.

_A $250 deduction for out-of-pocket classroom expenses by teachers, for 2010 and 2011. Cost: $390 million.

_A federal income tax deduction for state and local sales taxes, taken mostly by people who live in the nine states without state income taxes, for 2010 and 2011. Cost: $5.5 billion.

_The ability of older Americans to withdraw up to $100,000 a year from Individual Retirement Accounts, tax-free, to donate to certain public charities, for 2010 and 2011. Cost: $979 million.

_A business tax credit for research and experimentation expenses, for 2010 and 2011. Cost: $13.3 billion.

_Tax breaks for capital improvements to restaurants and other retail buildings, for 2010 and 2011. Cost: $3.6 billion.

_A tax break for active investors in foreign-based banking, securities and insurance firms, for 2010 and 2011. Cost: $9.2 billion.

_Increased depreciation and expensing for capital investments by businesses. Cost: $21.8 billion.

The package also:

_Spares more than 20 million middle-income households from tax increases averaging $3,900 from the Alternative Minimum Tax in 2010 and 2011. Cost: $136.7 billion.

_Imposes a lower estate tax for the next two years, allowing couples to pass estates as large as $10 million to heirs tax-free. The balance would be taxed at 35 percent. Cost: $68.1 billion.

_Provides a one-year Social Security tax cut for all wage earners, from 6.2 percent to 4.2 percent. Cost: $112 billion.

___

Source: Joint Committee on Taxation