What Do You Know About Income Tax Brackets 2011
Adding to the confusion is the topic of Income Tax Brackets 2011. So many taxpayers totally get it wrong. Tax legal professional Anthony Parent explains what the myths are, in addition to how to steer clear of common problems.
Every citizen needs to comprehend the historical context first, however. Every major civilization were ruined by one thing: High taxes. The founding fathers were no stranger to this reality --- they all studied classical history extensively. Because of this, the founders wanted to limit the power of the federal goverment, including the power to tax its citizens. However, a political faction, the progressives came into existence around the turn of the century, thought it would be preferable to tax income to both increase tax revenue and impose Income Tax Brackets 2011 that would make life more fair.
The Progressives eventually won the day in getting the Amendment they needed passed which would allow Congress to tax income. The Progressives asserted that the novel income tax would only affect the rich and would be used not just to raise revenue for more government expenditure, but also "even the playing field."
Since the first income tax was legally imposed in 1913, we have seen Income Tax Brackets 2011 go up and down. Still, one thing is true: the promise of only demanding a tax upon the rich has been promptly disregarded. There are frequent other tax on income the IRS extracts, not just income taxes and those are imposed on all wage earners.
Congress also gave marching orders to the IRS to collect and impose taxes known as employment and self employment taxes. 50% of what the IRS extracts is employment taxes. Those tax rates are not reflected in the tax brackets charts.
The present tax bracket rates of 10, 15, 25, 28, 33, and 35% for individual us taxpayers. Filing status also determines which tax bracket applies, not just income. These employment taxes are not anywhere to be found in these tax bracket rates. This omission is incredible.
Yet, these tax bracket rates do not apply to certain types on income. And as an added bonus, the employment and self employment taxes mentioned to above aren't imposed either. The kinds of taxes that receive favored treatment are long term capital gains, dividends and passive income from real estate investments.
Also, numerous upper income earners are subject to the AMT. To further complicate things, the Alternative Mimimum Income Tax Brackets 2011 may be relevant. And there are entirely different Income Tax Brackets 2011 for the Alternative Minimum Tax. Those tax rates are 26 or 28%. The Alternative Minimum Income Tax Brackets 2011 are either 26 or 28%. Yet in spite of the lesser rate of AMT, the effective tax rate possibly will end up higher as the AMT disallows many many significant write-offs. Local and State taxes are not allowed as write-offs.
Income Tax Brackets 2011 determine extremely little. What actually matters is a taxpayer's effective tax rate. Looking towards Income Tax Brackets 2011 as a important guide is a misstep.
Every citizen needs to comprehend the historical context first, however. Every major civilization were ruined by one thing: High taxes. The founding fathers were no stranger to this reality --- they all studied classical history extensively. Because of this, the founders wanted to limit the power of the federal goverment, including the power to tax its citizens. However, a political faction, the progressives came into existence around the turn of the century, thought it would be preferable to tax income to both increase tax revenue and impose Income Tax Brackets 2011 that would make life more fair.
The Progressives eventually won the day in getting the Amendment they needed passed which would allow Congress to tax income. The Progressives asserted that the novel income tax would only affect the rich and would be used not just to raise revenue for more government expenditure, but also "even the playing field."
Since the first income tax was legally imposed in 1913, we have seen Income Tax Brackets 2011 go up and down. Still, one thing is true: the promise of only demanding a tax upon the rich has been promptly disregarded. There are frequent other tax on income the IRS extracts, not just income taxes and those are imposed on all wage earners.
Congress also gave marching orders to the IRS to collect and impose taxes known as employment and self employment taxes. 50% of what the IRS extracts is employment taxes. Those tax rates are not reflected in the tax brackets charts.
The present tax bracket rates of 10, 15, 25, 28, 33, and 35% for individual us taxpayers. Filing status also determines which tax bracket applies, not just income. These employment taxes are not anywhere to be found in these tax bracket rates. This omission is incredible.
Yet, these tax bracket rates do not apply to certain types on income. And as an added bonus, the employment and self employment taxes mentioned to above aren't imposed either. The kinds of taxes that receive favored treatment are long term capital gains, dividends and passive income from real estate investments.
Also, numerous upper income earners are subject to the AMT. To further complicate things, the Alternative Mimimum Income Tax Brackets 2011 may be relevant. And there are entirely different Income Tax Brackets 2011 for the Alternative Minimum Tax. Those tax rates are 26 or 28%. The Alternative Minimum Income Tax Brackets 2011 are either 26 or 28%. Yet in spite of the lesser rate of AMT, the effective tax rate possibly will end up higher as the AMT disallows many many significant write-offs. Local and State taxes are not allowed as write-offs.
Income Tax Brackets 2011 determine extremely little. What actually matters is a taxpayer's effective tax rate. Looking towards Income Tax Brackets 2011 as a important guide is a misstep.
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