President Obama and Republican legislators put together a compromise tax and unemployment benefits package, which will still need to be voted on by Congress   Here are the details of the deal:

Extended unemployment benefits (up to a maximum of 99 weeks) would continue to be available until the end of 2011.

The (FICA) payroll tax on workers (but not employers) gets reduced by 2% in 2011.

Significantly reduces exposure to the Alternative Minimum Tax for 2010 and 2011 for over 20,000,000 taxpayers.

Two years of lower income tax rates:

• Lower rates in each tax bracket
• Continued lower taxes on capital gains
• Continued lower taxes on dividends
• Continues education tax credits
• Continues increased child tax credits
• Continues to offer some relief from the “marriage penalty”

A compromise on Federal estate tax changes avoids a big increase on taxes on large estates for 2 years:

• No estate tax on the first $5 million
• An additional $5 million exemption applies to the spouse
• The rest of the estate will be taxed at 35%

A grab-bag of business tax breaks are temporarily extended, including

• Ethanol subsidies
• Alternative fuel tax breaks
• Research and development tax credit
• Extension of increases in depreciation and expensing allowances for capital investments

Extension of some tax breaks for individuals, including:

• Tax deductions for teachers’ out-of-pocket expenses
• Deduction of state and local sales taxes in states that don’t have their own local income tax

See your personal tax advisor for individualized advice as to how these proposed changes may affect you and what you should be doing now in terms of year-end tax planning.