Social Security Payroll Tax Reduced
In 2011, individuals will see an increase in take-home pay thanks to the 2 percentage point drop in Social Security payroll tax on wages on income of up to $106,800.
Unemployment Benefits Extended
About 9 million Americans will benefit from the 13-month extension of unemployment benefits.
Extension of Coverdell Education Savings Account
Instead of shrinking down to $500, taxpayers can continue to contribute a maximum of $2,000 per year to fund private secondary and post secondary schools.
Self-Employed Income Tax Reduction
"For those that are self-employed in 2010, you may be able to reduce your income subject to self employment tax by your health insurance premiums," Meyerson says.
Tax Reduction for Teachers
Teachers receive a deduction of up to $250 for supplies purchased for the classroom, which is allowable without itemization.
2011 Gift Tax
The amount exempt from gift tax went from $1 million to $5 million for a lifetime of taxable gifts.
Repay $7,500 First-Time Homeowners Credit
Homeowners who received the 2008 $7,500 tax credit under the Housing and Economic Recovery Act of 2008 must begin repayment of the loan in a 15-year period starting in 2010.
"Although inflation has been relatively weak for most of 2009 and 2010, higher food commodity and energy prices have recently exerted pressure on wholesale and retail food prices," according to the U.S. Department of Agriculture.
As a result of food inflation, consumers may see a leap in grocery bills if food prices increase by the forecasted 2 to 3 percent in 2011.
Caveat: For tax-related issues, contact a tax provider or the Internal Revenue Service to determine whether reductions or credits apply to you.