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.
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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