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.