| The income tax rate is an essential component | | | | to the 2009 tax brackets and had not much |
| that estimates what your taxes would be for a | | | | option to change the tax slabs. |
| current year. The income earned in the previous | | | | However, with 2011, the IRS is expected to bring |
| year is taxed in the current year so you must be | | | | around several changes in the rate. It is expected |
| aware of the income tax rate in the current year | | | | that the top income tax would go back to 39.6 |
| to be able to calculate the income you earned in | | | | percent while the special low 10 percent bracket |
| the previous year. For most Americans the | | | | would be eliminated. With several poor families |
| economic shortage and the global meltdown | | | | suffering from the crisis, it is expected that the |
| resulted in a lot of tax defaulters as most of the | | | | Obama administration would extend income-tax |
| people were unable to pay their taxes on time. | | | | cuts to families earning less than $250,000 a year. |
| However, with the coming year 2011, President | | | | There would be increase in capital gains and the |
| Obama is stated to make certain changes in the | | | | maximum long-term capital gains tax rate might |
| income tax rate to create a level playing field for | | | | go back up to 20 percent from 15 percent. Your |
| all taxpayers. | | | | dividend income for the year 2011 is also |
| The income rate is decided upon by the Internal | | | | expected to be taxed as ordinary income in the |
| Revenue System or the IRS. There have been | | | | year 2011. Estate tax might also be revived in |
| several changes in the income tax rate over the | | | | 2011 while there might be some cuts in the child |
| years but now with Obama coming into power, it | | | | tax credit. These are just some of the changes |
| is expected that the Bush Tax Cuts would be | | | | that are expected in the rate for 2011. |
| eliminated and the 2001 and 2003 tax rates would | | | | If you are aware of the rate then you can easily |
| be once again restored. For the year 2010, the | | | | file your returns and you do not have to worry |
| economic shortage had cut down growth and | | | | about running after government officials or tax |
| there was slow economy and low inflation. For | | | | attorneys to guide you in filing your returns. |
| this reason the IRS had kept the tax rates similar | | | | |