Calculate Your Taxes With The Help Of The Income Tax Rate

Calculate Your Taxes With The Help Of The Income Tax Rate

The income tax rate is an essential component that estimates what your taxes would be for a current year. The income earned in the previous year is taxed in the current year so you must be aware of the income tax rate in the current year to be able to calculate the income you earned in the previous year. For most Americans the economic shortage and the global meltdown resulted in a lot of tax defaulters as most of the people were unable to pay their taxes on time. However, with the coming year 2011, President Obama is stated to make certain changes in the income tax rate to create a level playing field for all taxpayers.

The income rate is decided upon by the Internal Revenue System or the IRS. There have been several changes in the income tax rate over the years but now with Obama coming into power, it is expected that the Bush Tax Cuts would be eliminated and the 2001 and 2003 tax rates would be once again restored. For the year 2010, the economic shortage had cut down growth and there was slow economy and low inflation. For this reason the IRS had kept the tax rates similar to the 2009 tax brackets and had not much option to change the tax slabs.

However, with 2011, the IRS is expected to bring around several changes in the rate. It is expected that the top income tax would go back to 39.6 percent while the special low 10 percent bracket would be eliminated. With several poor families suffering from the crisis, it is expected that the Obama administration would extend income-tax cuts to families earning less than $250,000 a year.

There would be increase in capital gains and the maximum long-term capital gains tax rate might go back up to 20 percent from 15 percent. Your dividend income for the year 2011 is also expected to be taxed as ordinary income in the year 2011. Estate tax might also be revived in 2011 while there might be some cuts in the child tax credit. These are just some of the changes that are expected in the rate for 2011.

If you are aware of the rate then you can easily file your returns and you do not have to worry about running after government officials or tax attorneys to guide you in filing your returns.