|
|
President
Bush Signs Tax Relief
Prevention and Reconciliation Act of 2005
Link to
Whitehouse Press Release and Fact Sheet
 On
May 17, 2006, the President signed the Tax Relief Prevention and Reconciliation
Act of 2005 (“the Act”). While certain provisions do not have an immediate
effect on current taxation, others have a material current effect. The
following is a summary of the more significant provisions of the Act.
- The reduced rates on
capital gains and dividends (e.g., the 15% maximum rate) have been
extended through 2010. They had been scheduled to expire after 2008.
- The impact of the
alternative minimum tax (AMT) has been reduced. Specifically, the AMT
exemption amount has been increased for 2006 to $62,550 for joint
filers, $42,500 for single filers and $31,275 for married individuals
fling separately. For 2006, these amounts had been scheduled to be
$45,000, $33,750, and $22,500, respectively.
- The so-called
“Kiddie-Tax” has been broadened. The Kiddie Tax requires the taxation of
certain unearned income of a child at the top marginal rate of his or
her parents. Prior to the Act, the tax applied to children under the age
of 14. The Act increases this age limit to 18, beginning in 2006,
thereby capturing more unearned income at higher rates. The Act,
however, excludes married children who file a joint return.
- The Act extends by two
years the increased Section 179 expensing limit. Scheduled to revert to
$25,000 for property placed in service in tax years beginning after
2007, the increased limits ($108,000 in 2006) are now extended by two
years (through tax years beginning before 2010).
- Beginning in 2010,
taxpayers will be able to convert traditional IRAs into Roth IRAs
without regarding to the current $100,000 AGI limit.
For additional
guidance, or if you would like to
discuss how this will affect your tax planning, please contact our firm at
(412) 881-4411. If you do not have a contact at Case | Sabatini,
simply ask for Jim Dee and he'll make sure to put you in touch with the CPA
whose background most closely matches your needs.
www.CaseSabatini.com
Disclaimer: To ensure
compliance with requirements imposed by the Internal Revenue Service, we
inform you that any tax advice contained in this communication (including
any attachments) was not intended or written to be used, and cannot be used,
for the purpose of (i) avoiding any penalties that may be imposed, or (ii)
promoting, marketing, or recommending to another party any transaction or
matter addressed herein. |
|
