Retirement Income Journal
The information forum of the decumulation industry.

The provisions of the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA) and the Jobs and Growth Tax Relief Reconciliation Act of 2003 (JGTRRA) are scheduled to expire or “sunset” at the end of 2010.

For many investors, parting will be sweet sorrow.

EGTRRA and JGTRRA reduced tax rates on ordinary income, long-term capital gains, and qualified dividends; mitigated marriage penalties; expanded the child tax credit and the child and dependent care tax credit; and phased out limitations on itemized deductions and the phase-out of personal exemptions.

With the sunset of these provisions, individual income tax rates in 2011 are expected to stay the same for low- and middle-income taxpayers, but rates for individuals earning more than $200,000 or couples making more than $250,000 may revert to pre-2001 levels.

(Here’s a table that compares what income tax will look like in 2011 (after the sunset at end of 2010) with what the tax picture is today and could remain if we see a permanent extension of the 2001 and 2003.)