Tax Topic of the Day - August 23, 2010

“When will the current individual tax rates expire, and what will the new rates be?”

Unless Congress changes the tax rate groupings, rates will revert back to their 2000 rate structure in 2011. Expect to pay 3 to 5% more per tax bracket, using the graduated tax rate schedules of 15, 28, 31, 36, and 39.6%.

Comment: Multiply your taxable income by 5% and that will give you a rule of thumb of what your increase will be. For instance, if a husband and wife have taxable income of $200,000, multiply that by 5%. You will now pay an additional $10,000.