Tax Change Summary 2010 - 2017
Recent tax law changes have made definitive long-term tax planning more challenging. Clients are inquiring as to what the current and expiring laws will mean for them. The chart below highlights the changes over the next few years that will impact many of our clients.
Many of the tax breaks in recent tax-relief bills were designed to be phased in over a number of years, or are indexed to inflation. To help you determine how these tax laws affect your long-term planning, this article explains the changes scheduled to come into effect through 2017.
Pick a year from the list below to learn what tax changes affect that year's returns. We include changes for 2010 because they affect the tax returns you'll be working on in the spring of 2011. Congress made many significant tax changes in late 2010, including passage of the Tax Relief Act, that will have a major impact over the next several years.
|Top Federal Tax Bracket||35%||35%||35%||39.6%|
|Qualified Dividends||15%||15%||15%||Ordinary Income|
|Long-Term Capital Gain Rate||15%||15%||15%||20%|
|Medicare Tax on Investment Income||N/A||N/A||N/A||3.8%|
|Add'l Medicare Tax on Wages||N/A||N/A||N/A||0.9%|
|New QSBS Acquired||75% gain exclusion taxed at28% rate through 9/26/10.100% gain exclusion upto $10MM after 9/26/10||100% gainexclusion up to $10MM||50% gain exclusion,taxed at 28% rate||50% gain exclusion,taxed at 28% rate|
- ESTATE TAX
|Top Estate Tax Rate||35% with full step-up inbasis, or election for 0%estate tax but apply limited basis step-up amounts below||35%||35%||55%|
|GST Tax Rate||0%||0%||35%||55%|
|Estate and GST Tax Exemption||$5MM||$5MM||$5MM||$1MM(GST exemption subject to inflation adjustment)|
|Lifetime Gift Exemption||$1MM||$5MM||$5MM||$1MM|
|Annual Gift Exclusion||$13,000||$13,000||$13,000*||$13,000*|
|Basis||Step-Up of $1.3 MM(Additional $3MM to surviving spouse)Carryover basis on remainder of assets||Full step-up in basis||Full step-up in basis||Full step-up in basis|