Monday, September 20, 2010

The Year End Tax Planning 2010 – Still no Resolution

With the Bush government’s income tax cuts expiration in 2009, the US government is in a soup about the 2010 year end tax planning. The Congress and the White House are in constant talks to figure whether or not to extend the provision, and if so, for how long. With three months left for the year to end, citizens and the government have limited time to figure out the tax scenario.

Another challenge for the government along with the expired myriad tax break is a whole lot of other provisions that expire at the end of this year. The alternative minimum tax “patch” is yet to be approved for the 2010 tax year and the estate tax is not in play this year.

Though the government has been doing a lot of meeting and talking, a final decision and solution is yet to be found. If a solution and decision is not reached soon, the estate tax for one will come back in 2011 at a low US $1 million exemption.

While the conservative Democrats are all for the extension of the tax break for all American citizens, President Obama is considering the extension only for those who have an annual income of less that US $250,000.

The year end tax planning for this year just gets murkier and more confusing with taxpayers expecting the indecision and confusion passing well into 2011 as well.

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