For starters, new 2010 tax laws bring more relief.
They repeal the estate tax for decedents dying after 2009 and eliminate the stepped-up basis at-death transfer rule. They allow taxpayers to convert traditional IRA accounts to Roth IRA accounts regardless of income. And, they eliminate the overall limitation on itemized deductions for taxpayers with adjusted gross incomes above a threshold.
In addition, 2010 may be the last year you can take advantage of 11 previously-enacted changes, including:
§ The American Opportunity Credit, which increases the education credit to up to $2,500, includes required course materials, allows for higher income level phaseouts, and identifies 40% of the credit as refundable.
§ Nonbusiness and residential energy efficiency property credits, both of which allow taxpayers to receive a 30% credit for making specific, and certified, energy improvements to their homes.
§ Expanded NOL carrybacks, which permit businesses to carryback NOLs for up to five years for losses incurred between December 31, 2007, and January 1, 2010, and to offset 50% of the available income from the fifth taxable year preceding the loss and 100% of all income in the remaining four carryback years.
However, more than a dozen laws you benefited from in 2009 have disappeared. The unemployment compensation, tuition deduction, research credit, bonus depreciation, deduction for state sales tax, and increased first-year asset expensing changes, among others, will no longer apply in 2010.
Congress could add, extend, or eliminate laws at any time, so understanding and keeping up with the changes will prove vitally important as you proceed through the year.
I welcome the opportunity to meet with you to evaluate your personal situation. Please contact me to set up a complimentary one-hour consultation where we can discuss your program and how I can help you.
Sincerely yours,
