As we near April 15th, all eyes turn towards taxes and completing their federal and local returns. A look at tax rates and where they might likely be headed will help give you a head start on what to prepare for and any changes that you might be able to make in order to mitigate the negatives or accentuate the positives.
Since 2003 and through 2009 we have had the following six tax brackets for taxpayers in the US: 10%, 15%, 25%, 28%, 33%, and 35%. Without getting into party politics, these percentages were lower in the top four brackets due to the Bush administration tax cuts. Those who filed tax returns for 2008 and 2009 will use these when computing their taxes.
With the stimulus plan of 2009, there is a lowering of the withholdings from your paycheck to the tune of $400 for individuals with $75,000 or less in income and $800 for married couples who make less than $150,000. While this will not change the tax rates, at least you will get to keep more of your money.
In 2010, there will be an increase in the rates in the top two tax brackets which will affect those who have more taxable income. Those two rates increase from 33% and 35% to 36% and 39.6% respectively.
The question then becomes ‘what do I do to help lower my taxes in the future?’ The tried and true method of increasing your deductions becomes even more important to you. Many a tax-preparer will find that they will be communicating with their clients to find ways in which they can make this happen.
Work the system and make the most of what is available to you. That means to make changes in tax deferred or tax-free investments. Also, any expenditure that can be used as tax deduction becomes all the more important.
The increases in taxes are inevitable given the climate of needing more money to fund more expensive government programs and bailouts. But, it need not completely overwhelm those who are adversely affected. The American enterprising spirit is still alive and will be active in finding ways to keep our economy thriving during these trying times.
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1 users resposed " Federal Income Tax Rates for 2008 and 2009 – What is different? "
February 17 2010
how dramatically different the whole world is in 2010 compared to 2009.
The scale of losses suffered by banks and individuals in 2008/2009 was as dramatic back then as the enormous profits are now in 2009/2010.
It defies belief that in a time of unprecedented low interest rates from all central banks, that battered and bruised consumers are still paying virtually the same in interest as they were 2 years ago.
2010/2011 may well be the year that the debt rooster really does come home, because taxes will have to go up, bank interest rates will have to go up and mortgage rates will have to go up.
Do you genuinely believe that we’re being told the facts about how bad the economy is?
Its inconceivable that we are, otherwise a systemic banking failure would be on the cards as people attempted to withdraw their savings from the near bankrupt banks.
maybe ive just answered my own question….
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