After a few months another tax season will come carrying new tax laws that can frighten individual taxpayer. There are lots of changes might happen because of this new tax laws.

Here are the list of changes might happen for this coming tax season:

•    Increased Tax Rates – The tax rate will goes back to its original 39.6 percent and they will remove the low 10 percent income tax bracket. This tax rate was the original tax rate as of year 2000 tax rate. The Congress will still decide if this new tax laws was applicable.
•    Tax Revived for Estate – The $1 million exemption for federal estate tax returns and highest rate of 50 percent for dying individuals at the year 2010. The Congress already discussed this matter and wants to take some changes.
•    Increase for Dividend Tax Rates and Capital Gains – This is the year where expiration of long term tax deductions for capital gains and dividends will happen. Since 2008 long term capital gains has been free of tax that’s why for this coming 2011 it will go back to its original rate from 15 percent to 20 percent. Individuals using lower 10 percent tax rate that is included from 15 percent tax bracket. All dividends will tax as ordinary income at your maximum marginal tax rate.
•    Tax Credit: Child – After the year 2010 all child tax credit will go back to $500 from its $1000 per eligible child and at the same time this credit was not refundable unless a taxpayer are capable to earn more than $12,550 to their income. This is also included on Bush Tax Cut that scheduled to end this year.
•    Tax Credit: Payroll – Effective on 2011, Partial payment for payroll taxes was no longer available.
•    Section 179: Deduction of Expenses – The Congress still deciding to maximize all business expenses regarding to their equipments from $250,000 to $25,000.
•    Tax Credit: College Tuition – This credit was only limited for two years and capped in $1,800. This is also not refundable even if your regular income was not stable.
•    Earned Income Tax Credit (EITC) – Earned Income Tax Credit of a couples who have three or more children will temporarily increase.
•    Premiums Mortgage Insurance – On December 31, 2010 all mortgages had paid by mortgage insurance taken out last 2006 will expire.
•    Energy and Saving Home Improvements – At the end of 2010 the Energy and Saving Home Improvements 30 percent tax credit will decrease to 10 percent and will be capped to $500.

Hope you learn something from the past and be diligent to prepare and file your income tax returns on time.