Income Tax In 2010“I’m tired of hearing about money, money, money, money, money. I just want to play the game, drink Pepsi, wear Reebok.” Unfortunately for the rest of us, our lives aren’t sponsored by corporate giants (‘Course if yours is, fare play to you.). Now I know it may see a little early to be jumping on the topic of taxes, but just know the IRS doesn’t express that same sentiment. Income Tax in the New Year deserves particular discussion. If you recall, former President Bush designated a few tax breaks while in office. Well, at the end of this year they expire. President Obama already entered in a few ideas of his own in the 2010 Budget last May. If they all pass, which is improbable, we’d be looking at generating 61.7 billion in tax revenue for the federal government. Still think tax season is too far off? Americans workers are eligible for a refundable $400 tax credit and Obama plans to make this a permanent thing. So we got that going for us. Here’s the real thing though: Currently there are six tax brackets which are as follows: 10%, 15%, 25%, 28%, 33%, and 35%. It is important to remember that you’re not going to be paying 33% on all your income. It’s only the amount that falls over the parameters of the last bracket. So you don’t have to worry about making over X amount of income. These brackets were implemented in 2001 and as such are also scheduled to expire at the end of 2010. As of right now, Obama’s office has said they do plan to continue with these brackets unchanged. But change was the word of the month back in November and so it rings true here too. The way your income is measured for people in the 36% bracket is going to differ. The 36% bracket would start at $200k, subtracting the standard deduction and one personal exemption if you’re filing individually. The 36% bracket for married couples would start at $250 subtracting the standard deduction and two personal exemptions. Other brackets are just going to remain the same. What does this tell us when a progressive tax doesn’t, well, progress? It tells us that low inflation and a sluggish economy have pretty much made it all flat line. The best bet this tax season is to keep abreast on the new tax laws, know your exemptions and breaks, start early, and stock up on coffee. Checking out a site like taxfiling.net doesn’t hurt either. |
