What to expect in 2011 Income taxes - Higher?

by admin 8. November 2010 03:14

What are the changes might happen on the coming 2011 online tax return software season? Try to analyze certain things regarding what to expect in 2011 income taxes. It can affect life of different people – small or big.

Unexpected Increase – What to expect in 2011 income taxes? It’s expected that the congress might increase taxes for this coming tax season. This increase can affect both businesses and individuals – especially those people who are
not yet married that can earn $200,000 a year and married couples that can earn $250,000 a year. In no time, middle incomers can also experience this increase.

Higher Taxes for major changes – This increased is designed to simplify the tax codes. If the legislation do some
tax cuts they will also do the tax hikes in later time. Let’s say tax increase takes effects on 2011 and assuming
that the economy is growing steadily at this point deficit can be the first priority so that debt can be unsustainable.

Here are the things what to expect in 2011 income taxes:

•    Marginal rates increased from 33% and 35% to 36% and 39.6%.
•    Increased capital gains and dividends – for those in the top brackets. Perhaps it can cause 20% rate or little bit higher.
•    President Obama maximizes the value of deductions at 28% and giving it to charitable groups plus he tries to curtail tax break until 2011.
•    No cancelled estate taxes, but if the exemption is $3.5 Million it can set to $5 Million if the Senate agrees. The estate legislation may include the spousal transfer and can make the exemptions to $7 Million or more for couples.
•    Easiest way to get the minimum tax but no repeal.For businesses here are the things what to expect in 2011 income taxes – it can experience lots of cuts and hikes, but in a higher total tax bill. Here are the changes:
•    Increased SECA taxes for the owners of S firms and partnerships by disabling them in skirting of payroll taxes.
•    New classification for workers who are a real employee but treated as a contractor.
•    And for big corporations – elimination of tax breaks like domestic production deduction, depreciation acceleration, foreign income incentives and oil production.

In no time tax hikes will make a collision to people especially businesses. Anyone can stay clear of this mess by just avoiding spending lots of money in Social Security, Medicare and Defense. Meanwhile, any individual who can earn $100,000 in a single year can be at risk for higher taxes.

These increase can make lots of people unhappy even you! But, you can definitely have a lot of advantages, if you use online tax return software in 2011, like turbo tax. That is because they guarantee highest refund and also the
refunds come pretty quickly.

source: http://www.release-news.com/index.php/finance/46054-2011-irs-income-tax-return-what-to-expect-in-2011-income-taxes.html

Author of this article: Rahul
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