Skools Out
God
Just a warning – remember to breath –
In just six months, on January 1, 2011, the largest tax hikes in the history of America will take effect.
They will hit families and small businesses in three great waves.
OnJanuary 1, 2011, here’s what happens... (read it to the end, so you see all three waves)...
First Wave:
Expiration of 2001 and 2003 Tax Relief
In 2001 and 2003, the GOP Congress enacted several tax cuts forinvestors, small business owners, and families.
These will all expire on January 1, 2011.
Personal income tax rates will rise.
The topincome tax rate will rise from 35 to 39.6 percent (this is also the rateat which two-thirds of small business profits are taxed).
Thelowest rate will rise from 10 to 15 percent.
All the rates inbetween will also rise.
Itemized deductions and personal exemptionswill again phase out, which has the same mathematical effect as highermarginal tax rates.
The full list of marginal rate hikes is below:
Higher taxes on marriage and family.
The"marriage penalty" (narrower tax brackets for marriedcouples) will return from the first dollar of income.
The child taxcredit will be cut in half from $1000 to $500 per child.
Thestandard deduction will no longer be doubled for married couples relativeto the single level.
The dependent care and adoption tax creditswill be cut.
The return of the Death Tax.
This yearonly, there is no death tax. (It’s a quirk!)For those dying on or after January 1, 2011, there is a 55 percent top death tax rate on estates over $1 million. A person leaving behind two homes, a business,a retirement account, could easily pass along a death tax bill to their loved ones. Think of the farmers who don’t make much money, but their land, which they purchased years ago with after-tax dollars, is now worth a lot of money. Their children will have to sell the farm, which may be their livelihood, just to pay the estate tax if they don’t have the cash sitting around to pay the tax. Think about your own family’s assets. Maybe your family owns real estate, or a business that doesn’t make much money, but the building and equipment are worth $1 million. Upon their death, you can inherit the $1 million business tax free, but if they own a home, stock, cash worth $500K on top of the $1 million business, then you will owe the government $275,000 cash! That’s 55% of the value of the assets over $1 million! Do you have that kind of cash sitting around waiting to pay the estate tax?
Higher tax rates on savers and investors.
The capital gains tax will rise from 15 percent this year to 20 percent in2011.
The dividends tax will rise from 15 percent this year to 39.6percent in 2011.
These rates will rise another 3.8 percent in 2013.
In just six months, on January 1, 2011, the largest tax hikes in the history of America will take effect.
They will hit families and small businesses in three great waves.
OnJanuary 1, 2011, here’s what happens... (read it to the end, so you see all three waves)...
First Wave:
Expiration of 2001 and 2003 Tax Relief
In 2001 and 2003, the GOP Congress enacted several tax cuts forinvestors, small business owners, and families.
These will all expire on January 1, 2011.
Personal income tax rates will rise.
The topincome tax rate will rise from 35 to 39.6 percent (this is also the rateat which two-thirds of small business profits are taxed).
Thelowest rate will rise from 10 to 15 percent.
All the rates inbetween will also rise.
Itemized deductions and personal exemptionswill again phase out, which has the same mathematical effect as highermarginal tax rates.
The full list of marginal rate hikes is below:
- The 10% bracket rises to an expanded 15%
- The 25% bracket rises to 28%
- The 28% bracket rises to 31%
- The 33% bracket rises to 36%
- The 35% bracket rises to 39.6%
Higher taxes on marriage and family.
The"marriage penalty" (narrower tax brackets for marriedcouples) will return from the first dollar of income.
The child taxcredit will be cut in half from $1000 to $500 per child.
Thestandard deduction will no longer be doubled for married couples relativeto the single level.
The dependent care and adoption tax creditswill be cut.
The return of the Death Tax.
This yearonly, there is no death tax. (It’s a quirk!)For those dying on or after January 1, 2011, there is a 55 percent top death tax rate on estates over $1 million. A person leaving behind two homes, a business,a retirement account, could easily pass along a death tax bill to their loved ones. Think of the farmers who don’t make much money, but their land, which they purchased years ago with after-tax dollars, is now worth a lot of money. Their children will have to sell the farm, which may be their livelihood, just to pay the estate tax if they don’t have the cash sitting around to pay the tax. Think about your own family’s assets. Maybe your family owns real estate, or a business that doesn’t make much money, but the building and equipment are worth $1 million. Upon their death, you can inherit the $1 million business tax free, but if they own a home, stock, cash worth $500K on top of the $1 million business, then you will owe the government $275,000 cash! That’s 55% of the value of the assets over $1 million! Do you have that kind of cash sitting around waiting to pay the estate tax?
Higher tax rates on savers and investors.
The capital gains tax will rise from 15 percent this year to 20 percent in2011.
The dividends tax will rise from 15 percent this year to 39.6percent in 2011.
These rates will rise another 3.8 percent in 2013.