2011 Personal Tax Guide

At Dent, Baker & Company, LLP, it is our commitment to be your most trusted advisor. Our tax professionals are dedicated to providing comprehensive methods for determining tax-saving strategies, helping you accomplish your financial goals and preserve your family’s wealth. Attached please find our 2011 Personal Tax Guide. This guide includes all major tax law changes through December 17, 2010.

2010 was a year of changes beginning in February, when President Obama outlined his administrative policy initiatives, initiating the most significant reform since the Great Depression. In March, health care reform was enacted with the passage of The Patient Protection and Affordable Care Act as well as the Health Care and Education Reconciliation Act and Hiring Incentive to Restore Employment Act.

July brought the Dodd-Frank Wall Street Reform and Consumer Protection Act, the most sweeping overhaul of U.S. financial regulation in recent years. Although there are no significant tax provisions in the legislation, there are major investor protections, including the establishment of a Consumer Financial Protection Agency and an Office of Financial Literacy.

The Education Jobs and Medicaid Assistance Act was passed in August 2010 followed by the passage of the Small Business Job Tax Relief Act in September.

Finally, on December 17, 2010, The Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010 was enacted. This sweeping legislation extended several Bush tax cuts that were scheduled to expire at the end of 2010 for two more years. A patch for the alternative minimum tax was enacted in order to prevent millions of people from becoming subject to that additional tax. The 50% bonus depreciation has been boosted to 100% for qualified investments made on or after September 9, 2010 and on or before December 31, 2011. The 50% bonus depreciation will be allowed for qualified investments made in 2012. There are major changes in the estate tax, including a maximum estate tax of 35 percent and an applicable exclusion amount of $5 million ($10 million for married couples) for decedents dying on or after January 1, 2011 and on or before December 31, 2012.

The results of the mid-term elections in November 2010 will definitely impact future legislation. Coupled with a sluggish economic recovery and the continued threat of terrorism, we continue to live with uncertainty. Now, more than ever, it is more important to pay attention to your financial position, to ensure that you are doing what you can to mitigate your income, estate and gift tax liabilities and plan for your financial goals, such as college savings for your children, retirement planning, cash flow needs, and transfer of assets to future generations.

The best way to use this guide is to identify areas relevant to your situation and then call us to schedule a time to discuss. As always, Dent, Baker welcomes the opportunity to provide you with guidance and help you maximize your income through effective implementation of tax-saving approaches. Contact us today to review your specific tax situation and determine whether a particular planning strategy is right for you.

The general information in this publication is not intended to be nor should it be treated as tax, legal, or accounting advice. Additional issues could exist that would affect the tax treatment of a specific transaction and, therefore, taxpayers should seek advice from an independent tax advisor based on their particular circumstances before acting on any information presented. This information is not intended to be nor can it be used by any taxpayer for the purpose of avoiding tax penalties.