On December 17, 2010, President Obama signed into law the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 (the 2010 Tax Relief Act). The 2010 Tax Relief Act extends Bush-era tax cuts for two years, and provides significant estate and gift tax changes and alternative minimum tax (AMT) relief. The bill also contains other tax incentives for businesses and individuals, including 100% first-year write-offs of qualifying property placed in service after Sept. 8, 2010 and before Jan. 1, 2012, a payroll/self-employment tax cut of two percentage points for 2011 for employees and self-employed individuals, and extensions of other tax incentives for businesses and individuals.

Major Income Tax and Employment Provisions

Extension of Current Individual Income Tax Rates

Current individual income tax rates are due to expire on December 31, 2010. Upon expiration, the maximum federal income tax rate applicable to individuals would increase to 39.6%. The 2010 Tax Relief Act postpones the expiration of current tax rates for two years until the end of 2012. Hence, the maximum ordinary federal income tax rate applicable to individuals will remain at the current 35% level through 2012....