subject: Stay Out Of Trouble When Getting Into New Federal Income Tax Brackets 2011 [print this page] Federal Income Tax Brackets 2011 are incredibly perplexing. And worse, many us taxpayers do not appreciate the significance, or in certain cases, the lack of importance of Federal Income Tax Brackets 2011. On one hand, Federal Income Tax Brackets 2011 overstate taxes, yet on the other hand they minimize taxes. Tax Lawyer Anthony E. Parent of Parent & Parent LLP, the IRSmedic, breaks down the confusion and shares significant information to help a taxpayer reduce taxes and avoid IRS problems.
But first some quick history. Every major culture were destroyed by one thing: Confiscatory 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 authority of the central goverment, including the ability to tax. However, a political faction, the progressives came into being around the turn of the century, thought it would be preferable to tax its citizens based on income to both increase tax revenue and impose Federal Income Tax Brackets 2011 that supposedly would make life more fair and equitable.
The two large claims: that the income tax would bring the so-called robber-barons down to size and be a boon for the welfare of the public proved to seductive for the nation to resist. Even 100 years ago, the national income tax promised to liberate the vast majority of the country from the tyranny of the few. And the only now antiquated concept it cost the country was liberty.
Once Congress had the legal authority to enforce an income Federal Income Tax Brackets 2011, rapidly the promised limited scope of the income tax was widened to drag down nearly everybody down. FDR was succesful in manufacturing an entirely novel kind of tax imposed on earnings: the employment taxes.
One of the most perplexing areas of the income tax is that there are additional taxes on income that taxpayers pay besides income tax that are based upon their income earnings. Perplexing enough? Well there are employment taxes, which Congress gets to impose a tax on, there are Social Security, Medicare and Unemployment insurance taxes.
For individual us taxpayers, the present tax brackets are 10, 15, 25, 28, 33 and 35%. Income is not the only determiner of tax bracket rate. Tax filing status also affects tax rates of taxpayers.
Yet, these tax brackets don't be relevant to certain types on income earnings. And furthermore, these employment taxes aren't assessed either. The types of taxes that obtain favored treatment are long term capital gains, dividends and passive income from real estate investments.
Of course, these Federal Income Tax Brackets 2011 ignore the fact that many higher income wage earners, the Alternative Minimum Tax could apply. The taxes the AMT assessed may be larger than the regular tax brackets, so don't be fooled by the name. Numerous times there is little minimum about the AMT. And significantly so. The reason is that the IRS charges a lesser tax rate, but begins to phaseout helpful write-offs akin to local and state taxes.
There is vastly little significance to Tax Brackets. What is more significant is the effective taxable rate. Relying on the Federal Income Tax Brackets 2011 to prepare what you will owe can follow to immenseerrors.
