It looks like 2010 likely won’t be all that different from 2009 – at least when it comes to taxes.
Each year, by law, the dollar amounts for certain tax provisions are indexed for inflation. But inflation hasn’t budged all that much (that’s good, right?) which means that a lot of nothing is happening. Here’s an update on next year’s numbers released by the IRS earlier this month:
- Personal and dependency exemptions remain at $3,650.
- The standard deduction for married filing jointly remains at $11,400.
- The standard deduction for single taxpayers and married filing separately remains at $5,700.
- The standard deduction for head of household increases by $50 to $8,400.
- The annual gift tax exclusion remains unchanged at $13,000.
The big kicker, of course, is what the heck is going on with the estate tax? As of now, nobody knows for sure.
Tax girl, you’re right: no one really knows what is going to happen in 2010 with the federal estate tax.
Although the general consensus is that Congress will keep the applicable exclusion amount at $3.5M and the tax rate at 45%, no one really knows for sure. Will Congress limit valuation discounts? Will they procrastinate more and pass a law in 2010 and apply it retroactively? Will they allow for portability? What about those who own farms and ranches, should the exclusion be higher to help them?
I am really interested in what is going to happen, and I know a number of people who are also interested. This is why I started Future of the Federal Estate Tax. http://threepointfive-45.blogspot.com/
With an 89-year-old parent who is increasingly frail, this is an issue that… shall we say… hits close to home! (I hate to think of the situation in terms of taxes, but my Dad, an eminent scientist back in the day, would entirely approve of it….) :-\