First, the alternative minimum tax, was patched so that middle income senior citizens are not caught paying an incremental tax bill. For 2010, the AMT exemption amounts will be $47,450 for unmarried individuals and $72,450 for married individuals filing jointly. For 2011, the amounts will be $48,450 and $74,450, respectively.
Next, the bill extends the benefit of senior citizens using IRA funds to make charitable donations. Seniors age 70½ and older can continue to contribute up to $100,000 directly from their IRAs to charity. The IRA charitable withdrawal isn’t deductible, but it is not included in taxable income for the year. This is a very significant advantage to most senior citizens whose tax on social security and health expense deduction depend on keeping their reported income down.
The withdrawal counts toward the IRA owner’s required minimum distribution — the amount retirees age 70½ or older are required to withdraw every year.
If you have already taken a distribution from your IRA in 2010, you cannot use the provision to give to charity. But if you haven’t taken your 2010 required minimum distribution, you have until Jan. 31, 2011 to make a contribution directly to charity and have it count toward your 2010 required minimum distribution.
Last, there is a break on estate taxes, an issue of concerns to senior citizens who may have significant estates. Rather than the $1 million exemption and 55% rate that would have applied to estates for 2011, the new law reduces these factors to an estate tax rate of 35% and an estate tax exemption of $5 million ($10 million for couples with proper estate planning).
So even though senior citizens can lament the fact they won’t get an increase in 2011 social security benefits, they did pretty well with this Congress.
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is Will P. If you didn’t win you will have another chance to win. I will be giving away a different book next week. Thanks to everyone for entering.
This week’s book giveaway is for the book, Why Are We So Clueless about the Stock Market? Learn how to invest your money, how to pick stocks, and how to make money in the stock market
. The purpose of this book is to help readers understand the basics of stock market investing. Material covered includes the difference between stocks and businesses, what constitutes a good business, when to buy and sell stocks, and how to value individual stocks. The book also includes a chapter covering four case studies as well as a supplemental chapter on the pros and cons of real estate versus stock market investing. 
