Taxes Make Comeback in 2011

in Tax
If Congress does not agree to extend some tax cuts beyond this year, many American people including those who have a child, want to buy an energy-efficient car, or will get married in 2011 will not find it as cheap as in 2010 because some tax cuts are set to disappear next year.
 
Capital Gains and Dividends
 
Prior to the Bush tax cuts, the tax rate on capital gains was 20 percent while taxpayers paid 39.6 percent on dividends, depending on their annual income. However, under the Bush tax program, the highest-earners are taxed at 15 percent in terms of the tax on capital gains and dividend income while the rates of both capital gains and dividends for lower-income filers are zero this year. People earning over $200,000 a year and married couples making over $250,000 a year would pay 20 percent for capital gains and dividends. 

 


However, in the 2011 budget proposal of President Obama, lower-income Americans will not be supported and taxed at 15 percent rates. Both rates for individuals with income of over $200,000 a year and married couples earning more than $250,000 a year would be 20 percent.

However, in the 2011 budget proposal of President Obama, lower-income Americans will not be supported and taxed at 15 percent rates. Both rates for individuals with income of over $200,000 a year and married couples earning more than $250,000 a year will be 20 percent.

 

Paycheck Credit


Under the 2009 stimulus bill called "Making Work Pay”, couples with income of less than $190,000 a year were eligible to receive up to $800 more in their paychecks every year.

 


“Making Work Pay” is set to expire next year

“Making Work Pay” is set to expire next year

 

Income taxes


In 2010, in America, individuals who earn over $373,650 are taxed at 35 percent. If Congress approves the expiration of the Bush tax cuts, the tax rate for the highest-earners will rise to 39.6 percent in 2011. So, individuals who earn nearly $80,000 a year are taxed at from 25 percent to 28 percent.

 


There is a strong opposite opinion of tax breaks between Democrats and Republicans. The former wish to extend tax cuts only to those earning less than $250,000 a year while for the latter, they should be extended for all.

There is a strong opposite opinion of tax breaks between Democrats and Republicans. The former wish to extend tax cuts only to those earning less than $250,000 a year while for the latter, they should be extended for all.

 

Estate Taxes


2010 was a completely tax-free year for real estate. However, the tax will come back with Estate tax will come back in 2011 with a rate of 55 percent in 2011.

2010 was a completely tax-free year for real estate. However, the tax will come back with estate tax in 2011 with a rate of 55 percent in 2011.

 

Tuition Credit


In 2010, students are eligible to deduct up to $2,500 of college-related expenses every year. This tuition credit is set to expire in 2011.

In 2010, students are eligible to deduct up to $2,500 of college-related expenses every year. This tuition credit is set to expire in 2011.

 

Marriage Tax


The standard tax deduction for married couples will expire on December 31, 2010

The standard tax deduction for married couples will expire on December 31, 2010

 

Child Tax Credit


In 2011, parents could file for a tax credit of only $500 for each child living in their home.

In 2011, parents can file for a tax credit of only $500 for each child living in their home.

 

Mortgage Premiums


Through 2010, married couples with income of less than $54,500 a piece filing separately and individuals earning less than $109,000 a year could receive monthly deduction of premiums for mortgage insurance.

 


This credit will no longer exist after December 31.

This credit will no longer exist after December 31.

 

 

Related links:

Images of Barack Obama’s Daughters in Brazil

Barack Obama's Newly Redecorated Oval Office

Barack Obama’s daughters Sasha and Malia Obama in pictures

 

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Taylor Meyer has 317 articles online and 9 fans

Economics is the study of our lives,our jobs, our homes, our families and the little decisions we face every day. Thus, I am keen on reading and studying economic issues.

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Taxes Make Comeback in 2011

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This article was published on 2010/12/23