The huge tax law passed in December-officially, the Tax Relief, Unemployment Insurance Authorization and Job Creation Act of 2010, which somehow neglected to include "World Peace" in the title-had few changes on the income tax side. The same tax rates from last year continue this year, as do various income tax benefits. Some tax breaks that lapsed in 2010 were reinstated retroactively and extended for this year.
However, the new law made dramatic changes to estate taxes. The federal exemption, known as the applicable exclusion amount, was set at $5 million, far above the $3.5 million in effect when the estate tax was last seen, in 2009.
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