Congress passed the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 (the 2010 Act). The 2010 Act extends the Bush tax cuts for another two years and includes additional cuts for businesses and individuals.

Individuals

The 2010 Act includes a payroll tax reduction of 2 percentage points on the Social Security tax rate for workers on wages up to the $106,800 taxable wage base for 2011. Taxpayers ages 70½ or older are allowed to make tax-free distributions to charity from their IRAs of up to $100,000 per taxpayer, per year.

EGTRRA Tax Cuts Extended

Certain Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA) provisions were set to expire in 2010. The 2010 Act postpones the sunset for another two years.