While there are certain needs that need to be addressed, and funding for regulations, it requires reasonable planning to help rejuvenate our weakened economy.
And somehow in between, taxpayers are caught in the middle of all these shenanigans.
As of late, there has been controversy and confusion when Obama decided to extend the Bush-era tax cuts for two more years.
The original plan was for Bush's tax cuts to be expired in the year 2010.
Now, the year 2011, it has been officially addressed that the extension will last another two more years, making issues a bit more complicated for the average taxpayer.
There is no need to cower in a corner.
I'm here to write exactly about these changes regarding the new changes in the 2011 federal income tax brackets.
Although the new changes may seem seem familiar, there is more to what is on the fine print.
10% Bracket $0 - $17,000 $0 - $8,500 15% Bracket $17,001 - $69,000 $8,501 - $34,500 25% Bracket $69,001 - $139,350 $34,501 - $83,600 28% Bracket $139,351 - $212,300 $83,601 - $174,400 33% Bracket $212,301 - $379,150 $174,401 - $379,150 35% Bracket Over $379,150 Over $379,150 It is worth noting that tax tables change each year.
Most of the time, these changes are quite insignificant, reflecting small adjustments to where certain incomes fall.
Brackets are adjusted to reflect inflation.
A quick way to evaluate how much this year's 2011 Federal income tax brackets may impact you is by using a calculator we recommend from Calcxml.
A quick summary is that because of the extension on the tax cuts, projections on taxes are unchanged and are similar to last year's tax brackets.
However, there is fear and hostility around the idea that after the tax cuts expire, new and higher taxes will be introduced.
For a number of taxpayers, this is already considered a miracle because many anticipated tax rates to peak at a 39% for the most wealthy.
These were the anticipated tax brackets if it weren't for Bush's extension on tax cuts.
Tax Bracket Married Couples Single (individuals) 15% Bracket $0 - $17,000 $0 - $8,500 15% Bracket $17,001 - $69,000 $8,501 - $34,500 28% Bracket $69,001 - $139,350 $34,501 - $83,600 31% Bracket $139,351 - $212,300 $83,601 - $174,400 36% Bracket $212,301 - $379,150 $174,401 - $379,150 39.
6% Bracket Over $379,150 Over $379,150 How is income tax is calculated Understanding how income is taxed is significant.
The way it works is that let's say you are an individual who is filed to be single, but make less than $34,500.
But one day, you happen to get a raise and pass that.
Essentially, everything between $8,501 - $34,500 will be taxed 15% and everything you make over will $34,500 will be taxed 28%.
In other words, there is no avoiding taxes unless you prioritize on opportunities on tax deductions like donating to a good cause.
If you do choose to donate to a charity for means of reducing your existing tax expenses, it is recommended to do it on the first of January to ensure nothing unexpected happens and all decisions are final.
Things to look out for Many people heard of the movement titled, "Making Work Pay" where workers get compensated an additional 2% to their income.
That is, if they work.
Some things to watch out for is individuals relying on that 2% because if an individual all of a sudden is short of income, it can translate to be a loss much more than ususal.
Programs like these should be taken into consideration to help avoid shortcomings before they even happen.
Indeed, taxes are no fun but it is an unavoidable circumstance with the way we live.
Tell us what you think about these newly introduced tax brackets for 2011 and what course of action you think should be happening regarding the new tax policies.