Congress Passes Tax Act – President to Sign Soon!
Late last night, the House passed The Tax Relief Act of 2010 with a fairly large majority vote of 277-148. This is the exact same bill that came over from the Senate so there will be no changes to the Act and President Obama should sign the bill before Christmas.
As discussed in some of our prior posts, this bill has a large number of tax goodies for farmers. The highlights are:
- Extension of Bush Tax Rates for two years including capital gains and dividend rates at a maximum of 15%
- A 2 % reduction in the employee’s portion of FICA taxes from 6.2% to 4.2%. Maximum savings of about $2,100 for each employee at the maximum wage base of $106,800
- Major estate tax reform (however, only for 2011 and 2012, but it is a start). Increase in lifetime exclusion to $5 million, top rate of 35% and portability of lifetime exclusions between surviving spouses
- 100% bonus depreciation for all of 2011 and the last 3 1/2 months of 2010
- Extension of Ethanol blenders credit to the end of 2011
Stay tuned for more analysis in future posts.
Paul Neiffer is a certified public accountant and business advisor specializing in income taxation, accounting services, and succession planning for farmers and agribusiness processors. Paul is a principal with CliftonLarsonAllen in Walla Walla, Washington, as well as a regular speaker at national conferences and contributor at agweb.com. Raised on a farm in central Washington, he has been immersed in the ag industry his entire life, including the last 30 years professionally. Paul and his wife purchase an 180 acre ranch in 2016 and enjoy keeping it full of animals.
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