View Full Version : Calculate Your 2011 Income Tax
BMT (RIP)
07-24-2010, 03:15
http://www.mytaxburden.org/
BMT
Lovely, I will get to keep roughly $ 175.00 less per month than I do now… :(
With Cap & Tax, that works out to be nearly $322.00/mo less... :(
Edited to add, time to scale back the income…
bandycpa
07-24-2010, 16:18
Mine was an extra $2,137 for the year if the Bush cuts weren't extended. The marriage penalty cost me $1,137 and losing half of the Child Tax Credit got the other $1,000. I'm not a big investor, nor do I have a lot of AMT items. Yet, the tax bite would hit me proportionally as much as anybody else.
Now, under the Obama budget, my taxes would actually be the same.
Here is a comparison showing the Bush Cuts expiring, the Bush Cuts remaining, and the Obama Budget Tax Policy.
http://www.taxfoundation.org/news/show/26118.html
Bandy
Last hard class
07-24-2010, 16:47
Now, under the Obama budget, my taxes would actually be the same.
Most people are missing that point.
Having an S corp, I am concerned about the dividends. Huge difference between the proposed budget and going back to ordinary income.
LHC
bandycpa
07-24-2010, 17:04
Most people are missing that point.
Having an S corp, I am concerned about the dividends. Huge difference between the proposed budget and going back to ordinary income.
LHC
The famous answer to any tax question is, "It depends". :D
If by dividends you mean distributions from your S Corp income, then those will still be taxed as ordinary income. However, if you actually have qualified dividends flow through the S Corp to your K-1 as a separately stated item, then there could be some differences because of the change in the qualified dividend tax rate.
Bandy
Last hard class
07-24-2010, 17:20
The famous answer to any tax question is, "It depends". :D
Bandy
You tax guys are great.:) Thanks for the answer. I have both.
What do you think the chances are that the Obama budget (with regards to the Bush tax cuts) will get passed in it's current form?
LHC
bandycpa
07-24-2010, 19:31
What do you think the chances are that the Obama budget (with regards to the Bush tax cuts) will get passed in it's current form?
LHC
I've heard a lot of things out there. I believe we'll get to keep the Child Tax Credits, the "lower to middle" income tax rates (10%, 15%, 25%), and I believe the AMT will be patched (yet again). I also believe that capital gains and qualified dividends rates are going to go up, and the estate tax being reinstated is a virtual lock.
Then again, we've had at least two major tax changes in less than 7 months (we normally have one per year max).
Bandy
Bandy....just a quick question - If the Bush tax cuts are allowed to expire, would it be better to be in the upper 1% of the 18% bracket than the lower 10% of the 28% bracket in 2011 :confused:
I can't believe I'm actually contemplating the incentive of making less money :eek:
> http://www.fivecentnickel.com/2010/02/15/2011-federal-income-tax-brackets-irs-income-tax-rates/
bandycpa
07-27-2010, 22:03
T-Rock,
After crunching some numbers based on the tax brackets for single filers (just because it was the first table I came to :D), you would still make more money by going into the lower 10% of the 28% bracket. The huge jump from 15% to 28% is discouraging, no doubt about it. Still, I'd venture into the 28% bracket knowing I would net more money there than by staying in the lower 1% of the 15% bracket.
Two things I tell my clients,: 1) I'd rather have 72% of something than 100% of nothing, and 2) never do a deal just because it's a good tax deal. Tax laws can change at the drop of a hat (even more so with this particular administration), and putting yourself into a situation just to save taxes (and not getting an economic benefit) will hurt you when the tax advantage is taken away and you still don't have the economic benefit (just like when the tax laws on real estate changed to disallow a lot of rental losses via the passive activity rules. Investors used depreciation losses to offset their taxes and improve their cashflow. Once this changed, the losses weren't as easily deductible, and it created cashflow problems for the investors that counted on those tax losses).
Sorry for the tangent. Hope this helps.
Bandy
I can't believe I'm actually contemplating the incentive of making less money :eek:[/url]LMMFAO!:D
Stay safe.
LMMFAO
Work more, less pay :D
After crunching some numbers...
Provided the Bush tax credits expire, would it be safe to assume that making $78,500 in the 28% bracket is virtually the same as making 69,900 in the 18% bracket (Married Filing Jointly) :confused:
Sorry for the tangent. Hope this helps.
Thanks Bandy, it does :D I'm gonna go see my tax guy this week :cool:
bandycpa
07-28-2010, 08:39
Provided the Bush tax credits expire, would it be safe to assume that making $78,500 in the 28% bracket is virtually the same as making 69,900 in the 18% bracket (Married Filing Jointly) :confused:
There's a lot of factors that go into that calculation. I'd run those scenarios through the website BMT featured in the first post using the different types of income you may have. That will give you an idea of what's going on when you talk with your tax guy.
Thanks Bandy, it does :D I'm gonna go see my tax guy this week :cool:
The summer is a great time to talk with us. May want to wait til next week since 2nd quarter payroll reports are due next Monday. :D