2010 Taxes
I have been thinking quite a bit about tax rate changes that are coming in 2010 (at least it looks like they are coming) and wanted to make sure everyone understands exactly what letting the Bush Tax Cuts expire means.
Currently every dollar that a married couple earns over 208,850.00 is taxed at 33% until you reach 372,950.00, then the tax you pay is 35% on every dollar earned over that. It is an important point to make that you pay much lower rates before you reach the 208,850.00 and you do not pay 33% or 35% on any income under 208,850.00 so by no means is your entire income taxed at 33% just because you make over 208K.
However, the rates will jump up substantially in 2010. The 33% rate goes to 35% and the 35% rate goes to 39.6%. The income levels will stay the same, slightly adjusted for inflation. Included in that plan as well is capital gains rates going from 15%-20% for those earners in those higher 2 tax brackets. There are some other changes, but these are the big ones.
We will be planning for those rates throughout the year.
