First, the alternative minimum tax, was patched so that middle income senior citizens are not caught paying an incremental tax bill. For 2010, the AMT exemption amounts will be $47,450 for unmarried individuals and $72,450 for married individuals filing jointly. For 2011, the amounts will be $48,450 and $74,450, respectively.
Next, the bill extends the benefit of senior citizens using IRA funds to make charitable donations. Seniors age 70½ and older can continue to contribute up to $100,000 directly from their IRAs to charity. The IRA charitable withdrawal isn't deductible, but it is not included in taxable income for the year. This is a very significant advantage to most senior citizens whose tax on social security and health expense deduction depend on keeping their reported income down.
The withdrawal counts toward the IRA owner's required minimum distribution — the amount retirees age 70½ or older are required to withdraw every year.
If you have already taken a distribution from your IRA in 2010, you cannot use the provision to give to charity. But if you haven't taken your 2010 required minimum distribution, you have until Jan. 31, 2011 to make a contribution directly to charity and have it count toward your 2010 required minimum distribution.
Last, there is a break on estate taxes, an issue of concerns to senior citizens who may have significant estates. Rather than the $1 million exemption and 55% rate that would have applied to estates for 2011, the new law reduces these factors to an estate tax rate of 35% and an estate tax exemption of $5 million ($10 million for couples with proper estate planning).
So even though senior citizens can lament the fact they won't get an increase in 2011 social security benefits, they did pretty well with this Congress.
You Pay More Taxes Than NecessaryAnd we guarantee your CPA has never told you The problem with paying taxes is that most people overpay. So if you are concerned about having enough in retirement, you must stop overpaying taxes. I know you think your CPA takes care of this for you. WRONG. I AM a CPA (retired) and I can tell you that 90% of CPAs do nothing more than enter your information into the little boxes on the tax return but NEVER tell you how to pay less next year. Why? Many of them simply do not know what we can show you. In ten minutes.
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