DTUS1610

Practice Matters DENTAL TRIBUNE | June 201010A Accordingly, as of Jan. 1, there is a one-year repeal of the estate tax. After 2010, unless Congress has acted, the estate tax will revert to the rules that existed before the Economic Growth and Tax Relief Reconciliation Act of 2001 where the highest estate and gift tax bracket is 55 percent, and the applicable exclusion amount is $1,000,000. Annual gift tax exclusion The gift tax annual exclusion remains at $13,000 for 2010. Generation skipping transfer tax As of Jan. 1, there is a one-year repeal of the generation skipping tax. Congress may attempt to reform the estate and generation skipping tax law in 2010. If Congress does not act, the gen- eration skipping tax will revert to the rules in effect before the Eco- nomic Growth and Tax Relief Rec- onciliation Act of 2001. Retirement plans/defined benefit dollar amount For defined benefit plans in 2010, the maximum benefit at age 65 under IRC Sec. 415(b) cannot exceed the lesser of (1) $195,000 or (2) 100 percent of the participant’s average compensation for his/her high three years of active participa- tion. Defined contribution annual maximum The annual limitation applicable to defined contributions plans for 2010 remains at the lesser of (1) $49,000 or (2) 100 percent of the partici- pant’s annual compensation. Elective deferral limit for SIMPLE IRAs and simple 401(k) plans The limit on SIMPLE plan con- tributions remains at $11,500 in 2010. Catch-up contribution limits for individuals age 50 and older is $2,500. Traditional IRA and Roth IRA The traditional IRA and Roth IRA contribution limit for 2010 remains at $5,000. The IRA catch-up limit is $1,000 in 2010. Personal exemption phase-out Taxpayers are entitled to claim a personal exemption for themselves and for their dependents. This personal exemption decreas- es their income subject to tax. The personal exemption amount remains at $3,650 for 2010. The personal exemption phase out is repealed for 2010. A final word As with any type of estate planning and yearly tax planning, you should always seek the assistance of a CPA, financial planner, your financial advisor and an attorney. Proper estate and tax planning can be very easy. However, the con- sequences of failing to plan can have a devastating effect on your dental practice and your loved ones. DT AD f DT page 8A About the author Stuart J. Oberman, Esq., has extensive experience in repre- senting dentists during dental partnership agreements, partner- ship buy-ins, dental MSOs, com- mercial leasing, entity forma- tion (professional corporations, limited liability companies), real estate transactions, employment law, dental board defense, estate planning, and other business transactions that a dentist will face during his or her career. For questions or comments regarding this article, visit www. gadentalattorney.com. Proper estate planning can be very easy.