Are Your New Irs Tax Brackets 2011 Confusing You

There is nothing more puzzling than the IRS tax code

. And further complicating issues is the idea of IRS Tax Brackets 2011. Many taxpayers create more than a few mistakes.Tax attorney Anthony Parent explains what the myths are, in addition to how to avoid frequent problems.

Originally, there was no federal income tax. Congress was not given this control to impose a tax on income initially, but that did not impede Congress from trying. Think about this importance, it took an Amendment, overruling the Constitution, for the federal income tax to be found to be legal. From raising tax revenue for social programs to demanding a tax upon the rich to "even the playng field."

With the Progressive's 16th Amendment in hand, Congress was now empowered to fire-up up the IRS with unforseen powers. Progressives' promises to use the new income tax to just tax the rich were quickly thrown aside.

The 16th Amendment was only supposed to go after the rich, but soon Congress found the rest of Americans to big a target not to tax by applying IRS Tax Brackets 2011 to them. This was a quintessential case of bait and switch. And soon, Congress looked to assess other kinds of income taxes.

Congress also gave marching commands to the IRS to collect and assess taxes known as employment and self employment taxes. 50% of what the IRS collects is employment taxes. Those tax rates are not reflected in the tax brackets.

For individual us taxpayers, the present tax brackets are 10, 15, 25, 28, 33 and 35%. Income is not the only factor of tax bracket rate. Filing status also impacts tax bracket rates of taxpayers.

And for certain types of income, the tax brackets don't apply at all. Income derived from passive income, long-term capital gains and dividends are taxed at rates totally different than the tax bracket rate. Not only that, but these employment taxes are not assessed either.

Of course, these tax brackets disregard the fact that many upper income wage earners, the Alternative Minimum Tax possibly will apply. And don't allow the term fool you, even though it says minimum in the tax, the amount imposed possibly will be higher. And significantly so. Why? For the reason that although the rate is lesser, the IRS is taxing a larger base --- for example, helpful write-offs similar to those for state and local taxes paid are not permissible.

Taxpayers should give more attention to their effective tax rate, rather than the tax rate the IRS Tax Brackets 2011 say they will be paying.It is not possible to guess taxes due based on raw income.

by: nat6zcg8gr

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