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Eleven Two Fund Management Tax Alert
President Extends and Expands Tax Breaks
June 14, 2006
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Dear John, On Wednesday, May 17, President Bush signed a tax relief bill that extends and expands several popular tax breaks which may affect you. The congressional Joint Committee on Taxation estimates the bill will save taxpayers $69 billion over 10 years. It has four main provisions: 1. The bill extends preferential 15% rates on qualified corporate dividends and long-term capital gains for two years. These rates, which were scheduled to expire after 2008, will now expire after 2010. |
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2. It raises the AMT income exemption (from $40,450 to $42,500 for
single filers and from $58,000 to 62,550 for joint filers) for 2006
only. It also lets you use all nonrefundable personal credits, such
as the Hope Scholarship and Lifetime Learning Credits, to offset
your AMT liability. This rule should protect 15 million taxpayers
from the AMT in 2006 .
3. Next, the bill extends the Section 179 limit on first-year expensing of business equipment for two additional years. This allowance, currently set at $108,000, had been scheduled to revert to $25,000 beginning January 1, 2008. 4. Finally, it lets you convert your traditional IRA to a Roth IRA, regardless of your income. Previously, you could convert only if your "modified adjusted gross income" was $100,000 or less. But you'll have to wait a bit; this rule doesn't kick in until 2010. If you'd like more information, call me at 770-642-9373 or 1-800-917-5016.
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Contact Information
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phone: 800-917-5016
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