The Individual Investor's Guide to Personal Tax Planning for Tax Year 2010

The Individual Investor's Guide To Personal Tax Planning For Tax Year 2010 Splash image

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.

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.

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Discussion

David from Texas posted over 3 years ago:

What's the Estate Tax exemption for generation skipping transfers for 2011 and 2012 ?


AAII from Illinois posted over 3 years ago:

The generation-skipping transfer (GST) exemption amount is $5 million for 2011 and 2012, with a GST tax rate of 35%.


Claude from Georgia posted over 3 years ago:

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.


Bruce from Florida posted over 3 years ago:

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?


John from North Carolina posted over 3 years ago:

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.


Roger from Florida posted over 3 years ago:

How about providing a downloadable spread sheet format for the Tax Forecasting Worksheet?
Thanks


K from Indiana posted over 3 years ago:

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.


Jean from Illinois posted over 3 years ago:

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."


Keat from Illinois posted over 3 years ago:

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


T.E.LAWRENCE from Hawaii posted over 2 years ago:

Is there a tax bemifit contributing to grandchildren 529 education plans vice paying federal and or state taxes?


Harry from California posted over 2 years ago:

short term capital gains are not mentioned. Is short term capital gains the same as long term capital gains?


Alfred from Texas posted over 2 years ago:

I would like in detail on 401k distributions and the tax


James from California posted over 2 years ago:

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


Charles from Illinois posted over 2 years ago:

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


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