Welcome, Log In to Your Account
Worried about increasing taxes? Consider these tax-advantaged funds:
In December, Congress extended the expiring 2001 and 2003 tax cuts for two more years. Due to a "sunset" clause, the provisions were set to expire on January 1, 2011.
Your long-term capital gain rate depended on how long you held the shares and your income tax bracket.
Note: Short-term gains are gains on investments held under one year. Your short-term capital gains tax rate is the same as your ordinary income rate.
Your long-term capital gains tax rate depends on your income bracket.
Note: Short-term gains are gains on investments held under one year. Your short-term capital gains rate is the same as your ordinary income rate.
Beneficiaries of decedents who passed away in 2010 have two options:
1. Follow the previous rules for 2010: Estate assets are not taxed, regardless of the transfer amount. However, the cost basis of the transferred amount is carried over to the beneficiary (based on original share price when purchased by decedent).
2. Follow the new provisions: Estate assets are taxed at 35% with an exemption limit of $5,000,000 (based on share price as of the decedent's date of death, including adjustments).
Estate assets are taxed at 35% with an exemption limit of $5,000,000* (based on share price as of the decedent's date of death, including adjustments).
Contribution Limit: $500
Earnings: Any earnings withdrawn were taxed as ordinary income and subject to a 10% penalty unless used for college expenses. In other words, your original contributions were not taxed but the appreciation would have been.
Expenses: Qualified spending was limited to college-related expenses.
Hope and Lifetime Learning Credit: You were not allowed to claim both credits in the same year that you made a withdrawal.
Contribution Limit: $2,000
Earnings: Withdrawals from a CESA that are used to pay expenses for kindergarten through college are tax-free.
Expenses: Qualified spending includes kindergarten through 12th grade, plus college-related expenses.
Hope and Lifetime Learning Credits: These credits can be claimed the same year a withdrawal is made from a CESA.
Source: Joint Committee on Taxation
Please note that our representatives are not licensed tax advisors and cannot answer tax questions.
IRS Circular 230 Disclosure: American Century Companies, Inc. and its affiliates do not provide tax advice. Accordingly, any discussion of U.S. tax matters contained herein (including any attachments) is not intended or written to be used, and cannot be used, in connection with the promotion, marketing or recommendation by anyone unaffiliated with American Century Companies, Inc. of any of the matters addressed herein or for the purpose of avoiding U.S. tax-related penalties.
This information is for educational purposes only and not intended as tax advice. Please consult your tax advisor for more detailed information or for advice regarding your individual situation.