The recently enacted ?Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010? is a sweeping tax package that includes, among many other items, an extension of the Bush-era tax cuts for two years, estate tax relief, a two-year ?patch? of the alternative minimum tax (AMT), a two-percentage-point cut in employee-paid payroll taxes and in self-employment tax for 2011, new incentives to invest in machinery and equipment, and a host of retroactively resuscitated and extended tax breaks for individuals and businesses. Here's a look at the key elements of the package:

Personal Taxes

The current income tax rates will be retained for two years (2011 and 2012), with a top rate of 35% on ordinary income and 15% on qualified dividends and long-term capital gains.

• Employees and self-employed workers will receive a reduction of two percentage points in Social Security payroll tax in 2011, bringing the rate down from 6.2% to 4.2% for employees, and 12.4% to 10.4% for the self-employed.
• A two-year AMT ?patch? for 2010 and 2011 will keep the AMT exemption near current levels and allow personal credits to offset AMT. Without the patch, an estimated 21 million additional taxpayers would have owed AMT for 2010.

Return of the estate tax in the 2010 Tax Relief Act

• The estates of wealthy individuals who died in 2010 didn't pay any federal estate tax
• Death tax springs back to life in 2011 and is imposed at the top rate of 35% of the estate's value after the first $5 million.
• 2010 estates cam choose to use the 2011 rules which can actually lower the total tax bill. On one hand you choose the 2011 estate tax and on the other a higher potential capital gain on dispositions.

Small and Local Business Benefits

On the business side, the following business tax breaks that expired at the end of 2009 have been retroactively reinstated and extended through 2011 by the Tax Relief Act:

• The research and development credit.
• Businesses can write off 100% of their equipment and machinery purchases, effective for property placed in service after September 8, 2010 and through December 31, 2011.
• 15-year write-offs for qualified leasehold improvements, and restaurant buildings (and certain improvements to such restaurant buildings).
• The employer wage credit for activated military reservists.
• Extends for an additional year (i.e., through 2011) the temporary exclusion of 100% of gain on the sale of certain small business stock.

Disaster relief provisions impact Houston and the Gulf Coast Region -The following disaster relief provisions are extended through 2011:

• Low-income housing credit rules for buildings in Gulf Opportunity Zones.
• Tax-exempt bond financing for the Gulf Opportunity Zones.
• Bonus depreciation deduction applicable to specified Gulf Opportunity Zone extension property.