The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 (Act) signed by President Obama is expected to stimulate the economy by providing tax relief to individuals and businesses.  The Act reinstates many Bush-era tax cuts that expired in 2009 and extends others that were scheduled to expire on December 31, 2010.  The Act also overhauls the current estate and gift tax regime by providing generous estate and gift tax exemptions and rates for 2011 and 2012.  Some of the more notable provisions of the Act affecting businesses are described below.

Income Tax, Capital Gains, and Preferential Dividend Rates.  The current rates are extended through 2012.

2011 Employee Payroll Tax Cut.  Effective for 2011 only, the social security tax rate is reduced from 6.2% to 4.2% and the self-employment tax rate from 12.4% to 10.4%.

100% Bonus Depreciation.  The 50% bonus depreciation now applies to qualified property acquired after December 31, 2007, and before January 1, 2013, and...