The Individual Investor's Guide to Personal Tax Planning for Tax Year 2010
Much of the new tax bill signed in December 2010 is more of the same. Most of the tax rates and deductions that were in existence in 2010 will continue to be so in 2011 with the passage of the Tax Relief/Job Creation Act of 2010.
Faced with the combination of high unemployment, a slow economic recovery and the threat of higher across-the-board tax increases, Congress opted for the simplest solution—to extend the tax cuts. Though the decision keeps money in consumer’s pockets, and actually increases cash for workers, it comes at a cost. Estimates say the legislation will add $858 billion to the federal deficit, making it the most expensive economic stimulus the U.S. has ever put into place. This is what happens when politicians wait until the last minute to figure out a solution to a long-term problem.
In this article
- Tax Software, Books and Guides
- What’s New?
- Useful Tax Numbers
- Health Savings Accounts
- Investment Strategies: 2011 and Beyond
- Tax Planning Strategies
- Year-End Estate and Gift Tax Planning
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Regardless of what you think about the new tax legislation, you will still have to pay taxes. Nothing in the bill simplifies the process; hence, the need for our annual tax guide. We provide an overview of the tax rates and deductions likely to impact the majority of AAII members. Since there are many details, loopholes and pitfalls within the tax code, it is impossible for this guide to provide enough details to cover specific tax situations. Thus, if you have questions, please consult a tax professional. It is your tax return and the IRS will hold you responsible for any errors made on it.
Tax Software, Books and Guides
Congress’ delay in acting created problems for those who publish tax software, books and related guides. This is because of the logistics required to produce and distribute physical material and the very real deadline for having those products available to the public. Therefore, if you use any software program (e.g., TurboTax), book (e.g., “J.K. Lasser’s Your Income Tax 2011”) or related aid, check for updates. It is highly probable that updates, or a supplement, have been produced since the original product was placed on the market. TurboTax is good about providing updates to download, and J.K. Lasser will have a comprehensive e-supplement on its website. I am sure other providers will do the same.
To read more, please become an AAII Registered User or CLICK HERE.
Discussion
What's the Estate Tax exemption for generation skipping transfers for 2011 and 2012 ?
posted over 2 years ago by David from Texas
The generation-skipping transfer (GST) exemption amount is $5 million for 2011 and 2012, with a GST tax rate of 35%.
posted over 2 years ago by AAII from Illinois
From an IRS news release dated 12/23/10 and Revenue Procedure 2011-12, one learns that (1) the 2011 standard deduction for married couples filing a joint return will be $11,600; (2) the additional standard deduction for the blind and senior citizens will be $1150 for married individuals; (3) for married individuals filing a joint return the tax rate will be 10% for taxable income not over $17,000, then 15% up to $69,000 of taxable income, then 25% to $139,350, then 28% to $212,300, then 33% to $379,150, and 35% on the excess; and (4) the 2011 personal exemption will be $3700.
posted over 2 years ago by Claude from Georgia
Are the maximum income limits still in place for 2011 for a couple to contribute to a Roth IRA? But not for conversions from a standard IRA into a Roth IRA? So is a two-step process required for higher income couples - first contribute to a non-deductible standard IRA; then immediately convert that to a Roth IRA?
posted over 2 years ago by Bruce from Florida
I can't seem to save off the entire article in a single PDF file, as I was able to do last year. It looks like I'll need to save off many separate files, including 2011 Tax Rates, etc.
posted over 2 years ago by John from North Carolina
How about providing a downloadable spread sheet format for the Tax Forecasting Worksheet?
Thanks
posted over 2 years ago by Roger from Florida
Where is the link to the downloadable PDF file for the whole article?? I received no response from a message to the webmaster several days ago.
posted over 2 years ago by K from Indiana
For the link to the PDF, look under the second paragraph of the article on the left. There's a heading that says "Print This Article" and the second choice is "Download Printable PDF."
posted over 2 years ago by Jean from Illinois
This tax guidelines are so useful even for someone like me using Turbotax to prepare my income tax. They are written in concise easy to understand language, However, they are most helpful especially in tax planning for the following year. I highly recommend everyone to read this article.
Keat
posted about 1 year ago by Keat from Illinois
Is there a tax bemifit contributing to grandchildren 529 education plans vice paying federal and or state taxes?
posted about 1 year ago by T.E.LAWRENCE from Hawaii
short term capital gains are not mentioned. Is short term capital gains the same as long term capital gains?
posted about 1 year ago by Harry from California
I would like in detail on 401k distributions and the tax
posted about 1 year ago by Alfred from Texas
Are the maximum income limits still in place for 2011 for a couple to contribute to a Roth IRA? But not for conversions from a standard IRA into a Roth IRA? So is a two-step process required for higher income couples - first contribute to a non-deductible standard IRA; then immediately convert that to a Roth IRA?
posted about 1 year ago by Bruce from Florida
Bruce, yes. make the non-deductable contribution and switch it to a Roth. As long as there are no gains in that short period of time, you will not owe any tax. I did ours on online at Vanguard and it took about 10 minutes. Simply and my wife and I have another 10,000 growing tax free. Awesome. How this helps. Jim Hoffmann
posted about 1 year ago by James from California
The IRS says, "Can you contribute to a Roth IRA for your spouse? You can contribute to a Roth IRA for your spouse provided the contributions satisfy the spousal IRA limit discussed in chapter 1 under How Much Can Be Contributed, you file jointly, and your modified AGI is less than $179,000." Read publication 590 for more information at http://www.irs.gov/publications/p590/index.html. -Charles Rotblut, AAII
posted about 1 year ago by Charles from Illinois
