2011 Tax Law Updates

Below you will find a list of some tax law changes and updates for 2011.

2010 Tax Law Changes:

In December of 2010, President Obama signed a 2 year extension of the Bush-Era tax cuts.  So for most people, the tax rates and tax laws will stay the same for the next couple of years.  Below is a detailed explaination of what was passed.

Click Here: 12-2010 Tax bill-Bush cuts extended.pdf

Some highlights of the bill are:

• Capital Gains Rates to remain the same.
• $1,000 Child tax credit.
• AMT Patch for 2 years
• Estate Tax Relief
• Energy Incentives

Social Security Tax  Reduction for 2011:

Social Security taxes will be reduced in 2011 from 6.2% to 4.2%.  This reduction will apply to wage paid up to the maximum Social Security limit of $106,800.  It goes to everyone regardless of income.

For the Self-Employed, your Social Security tax will drop from 12.4% to 10.4% in 2011.

If you pay wages to others, this will not affect what you pay as an employer.  Employer's will still pay 6.2% Social Security.

Currently this tax break will only apply to 2011.

Health Savings Accounts (HSA) Eligible Expenses:

2011 Change in Over-the-Counter Medicines and Drugs:

Click to view:  OTC drugs 2011 beyond (1-3-11).pdf 

This means you will not be able to use your HSA to pay for certain "over-the-counter" prescriptions.  A doctors prescription will be required.