My Open Book

2010 will be the last year for most tax breaks. Many tax breaks and stimulus plans expire at the end of this year. All taxpayers can expect to pay more in taxes come 2011. This will be difficult for most of us; we have all become accustom to lower taxes during our economic hardship across the country.

2010, 2011 Federal Income Tax Tables

Tax rates that were in effect before 2001 will return. The top income tax rate is scheduled to go back to 39.6 percent, and the special, low 10 percent bracket will be eliminated. Whether this will actually happen will be at the digression of Congress during 2010. If Congress allows the current plan, the following changes will go into effect:

We will see increases to the following tax rates:

Capital Gains Rates
Dividend Tax Rates
Estate Tax

We will see reductions in the following tax credits:

Child Tax Credit
Education Credit
Earned Income Tax Credit

And the following deductions are to be eliminated:

Mortgage Insurance Premiums – no longer available
College Savings Plans – no longer tax free
Payroll Tax Credit – no longer available

According to the IRS, the upcoming changes will cause the 2011 federal tax brackets to be considerably higher, looking something like this:

Tax Bracket Married Filing Jointly Single:

15% Bracket $0 – $70,040 $0 – $35,020
28% Bracket $70,040 – $141,419 $35,020 – $84,872
31% Bracket $141,419 – $215,528 $84,872 – $177,006
36% Bracket $215,528 – $384,860 $177,006 – $384,860
39.6% Bracket Over $384,860 Over $384,860

However, this could all change if Congress approves extensions or other changes for lower taxes.

TurboTax also offers many other services; if you have a question, they have an answer. Someone is available 24 hours a day, 7 days a week. When it comes to filing your tax return, there isn’t an easier service available for the amount you’ll pay. For a very low fee, even free to qualifying taxpayers, you can e-file your taxes with ease.

For more information and answers to all your tax-related questions, visit TurboTax Online.

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