If you turn on the news tonight, no doubt the top national story will be the year-end tax deal that the Obama Administration and Republican leaders have negotiated. While it is not yet final, the deal would extend the current tax rates (they were scheduled to go up next year) for another two years and extend unemployment benefits. Most importantly for many middle American families, the bill would increase the Alternative Minimum Tax (AMT) patch. This will keep millions of families from having to pay additional taxes.
This finally gives us more direction from an income tax standpoint and could potentially make the next couple of years great for Roth IRA conversions. If you have questions about if you should convert, please email me.
Finally, the tax bill would give us clear direction on the Federal Estate Tax (a tax that must be paid at ones death to transfer money to their heirs). It would increase the exemption amount to $5 million that could go to the next generation free of federal estate tax.
for more complete tax details, check out : http://blogs.wsj.com/washwire/2010/12/07/the-big-issue-the-cost-of-a-second-year-of-tax-cuts/
and for estate tax details: http://www.frumforum.com/the-estate-tax-rises-from-the-dead