It has become convenient for Congress to pass temporary tax laws which apply for one, two or maybe five years, then, the old rules apply again. There were many of these provisions set to expire in 2010, some of which Congress extended for two more years. These extensions included the lower long-term capital gains and qualified dividends tax rates of 0% and 15%, now set to increase to 10% and 20% in 2013. Also, some of the energy tax credits which expired have been revised and extended under rules similar to those we saw three and four years ago. (Not as generous as the rules we had for the last two years.) The website www.energystar.gov offers excellent information on the revised energy credits and eligibility requirements.
New provisions in the law include increased business depreciation to 100% in the first year for many new assets purchased in 2011 and 50% for many new assets purchased in 2012. For individuals, you may already be aware of the 2% discount for employees’ and self-employed individuals’ Social Security Taxes for 2011. Although this is set to expire on January 1, 2012, an extension of this benefit into 2012 is being discussed currently by President Obama and the House and Senate.
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