EG Tax wants you to be up to date on all the new tax law changes. Below is everything you need to know about 2010 tax law changes.
Social Security Takes a Holiday- You may notice a few extra bucks in your paycheck this year. That’s because the government has reduced the amount of social security tax that is being withheld from your paycheck. Rather than 6.2% of your gross pay withheld, you will only have 4.2% withheld for social security tax.
Sales Tax Remains on the Schedule A- For those who need a boost on their itemized deductions, you will still be able to write of your sales tax paid on the Schedule A. This includes writing off the purchase of a new vehicle.
Teachers/Educators Still Get a Break- Those who teach k-12 and have qualified expenses may still be able to write off the first $250 as an adjustment to income. Before you take this deduction, please make sure that you have the necessary hours in order to claim this expense.
Energy Credits are back in….But with less of a bite- While the energy credits for your personal residence have been extended, they have reduced the expense to credit ratio. While the old credit allowed for 30% of qualified expenses, this credit will only give you 10%.
The Gift of Giving Still Allowed- You can still take a tax free rollover of $100,000 from your traditional IRA and donate it to a qualified charity. Remember, you cannot take the deduction on the schedule A if you elect to take this tax free distribution.