The Tax Relief Act will extend unemployment benefits for about 2 million unemployed persons in the month of December and a total of 7 million over the next year.  Federal unemployment benefits amount to only about $260 per week, but it is money that families need for basic necessities—money that flows right back out into the economy.  If the extension had not passed, the average affected household’s income would have dropped by one-third. The corresponding drop in spending would have further increased job losses, further delaying the already slow recovery.   Read this complete analysis of the impact at AdvisorFX (sign up for a free trial subscription with full access to all of the planning libraries and client presentations if you are not already a subscriber).

For previous coverage of President Obama’s tax agreement in Advisor’s Journal, see Obama Tax Agreement Faces Stiff Resistance in Congress (CC 10-112), Obama Tax Agreement Passed by House (CC 10-117) and Obama’s Social Security Tax Holiday: Penny Wise and Pound Foolish? (CC 10-119).

The so-called Bush tax cuts are proving to be popular ammo in the 2010 election cycle, with Democrats accusing the Republicans of slashing the tax base by pandering to the wealthiest Americans, and Republicans accusing the Democrats of hindering economic recovery by taxing Americans to the poorhouse.

We have heard ad infinitum about the 2011 regression of the estate tax to 2001 rates, exemptions, and exceptions and the income tax rate increase that will result from Congressional inaction—those are, after all, the easiest changes to digest and spit back over the airwaves as a twenty-second sound bite. But there are dozens of other important income tax provisions that will expire if Congress does not step in by the end of the year to extend them. While not as dramatic as the tax rate increase or estate tax conundrum, these provisions can profoundly affect a taxpayer’s tax exposure and may warrant an income tax strategy overhaul.   Read this complete article at AdvisorFX (sign up for a free trial subscription with full access to all of the planning libraries and client presentations if you are not already a subscriber).

For previous coverage of the Bush tax cuts in Advisor’s Journal, see CBO Analysis Supports Extending Tax Cuts (CC 10-49) as well as coverage at Bush Tax Cuts Linger Long After Sunset.

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