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United States Tax Highlights and Changes

Highlights of recent tax-related events from the Internal Revenue Service, along with major tax changes for the 2010 tax year.

Highlights

Affordable Care Act Tax Provisions
Health coverage legislation enacted this year includes a small business health care tax credit to help them and small tax-exempt organizations afford the cost of covering their workers.

Tax Benefits of the American Recovery and Reinvestment Act of 2009
Energy, education, new vehicle and homebuyer credits available to help save you money.

Major Tax Changes for 2010

Child-Related Tax Changes
Information on adoption benefits, child's investment income, the definition of a qualifying child, and additional child tax credit.

COBRA Premium Assistance
IR 2010-52 and Continuation Extension Act of 1020 (HR 4851) made changes to the COBRA premium assistance provisions.

Decrease in Personal Casualty and Theft Loss Limit
General rule for personal casualty or theft loss for 2010.

Deduction for New Motor Vehicle Taxes
You can deduct state or local sales or excise taxes (or certain other taxes or fees in a state without a sales tax) in 2010 for the purchase of any new motor vehicle(s) after February 16, 2009, and before January 1, 2010.

Earned Income Credit (EIC)
The earned income credit amounts have increased for 2010.

Economic Recovery Payment
Information on economic recovery payments.

Education-Related Tax Changes
Information on education savings bond exclusion; Hope, American opportunity, and lifetime learning credits; and qualified tuition programs.

Health/Medical-Related Tax Changes
Information on Archer Medical Savings Accounts (MSAs), Health Savings Accounts(HSAs), and long-term care premiums.

Income Averaging for Farmers and Fisherman
Averaging farming and fishing income. Information on settlements from Exxon Valdez litigation.

Increase in Limit on Long-Term Care and Accelerated Death Benefits Exclusion
New limits on exclusion payments made under a long-term care insurance contract.

Increased Standard Deduction
The increased standard deduction for certain filers.

Information on Home/Residence-Related Tax Changes
Information on home/residence-related tax changes.

Itemized Deductions
The limit on itemized deductions expired in 2010.

Personal Exemption Amount
The amount you can deduct for each personal exemption for 2010 is the same as the amount you could deduct for 2009.

Qualified Transportation Fringe Benefits
Changes to the monthly exclusion for commuter highway vehicle transportation and transit passes and reimbursement for reasonable expenses of qualified bicycle commuting.

Residential Energy Credits
Information on residential energy credits.

Social Security and Medicare Taxes
The maximum amount of wages subject to the social security tax and Medicare tax remains unchanged from 2010.

Special Limitation Period for Retroactively Excluding Military Retirement Pay
If you retire from the armed services based on years of service and are later given a retroactive service-connected disability rating by the VA, your retirement pay for the retroactive period is excluded from income up to the amount of VA disability benefits you would have been entitled to receive.

Standard Mileage Rate
The standard mileage rates for business use and medical or move-related use of your vehicle have *decreased* for 2010. The standard rate for charitable use remains the same.

Wage Threshold for Household Employees
The social security and Medicare wage threshold for household employees is...

Related Websites

The IRS maintains a page of recent tax changes related to businesses, estates and trusts, exempt organizations, foreign issues, individuals, IRAs, and other retirement plans.


The information on this website, and the use of this website, are both provided without warranty of any kind. Income tax rules change every year and some information may be out of date. All readers wishing to take advantage of the information offered here should consult a qualified income tax preparer. In no event will Brad Howland, Howland Tax Services, or this website be liable for any damages, including lost profits, arising out of the information offered on this website, or the usage of this website. All material on this website Copyright © 2001-2017 by Howland Tax Services, Inc. Please contact us for permission to use this material in any form. Website designed and maintained by Brad Howland.