Individual Income Tax Rates
The lowest individual income tax bracket of 10% would vanish after the scheduled expiration of the Bush tax cuts. Due to the 2010 Tax Relief Act, the individual tax rates will remain in effect at the current levels for 2011 and 2012. The final act that was passed includes an extension of the lower tax rates for all taxpayers, not just individuals making less than $200,000 or those couples making less than $250,000. The Joint Committee on Taxation estimates that the cost will total $89.3 billion. For the next two years, there is certainty for individual tax rates. However, the tax cuts will be on the agenda again shortly after the 2012 election.
One area of tax planning that has seen a spark of interest is the Roth IRA conversion. Due to the tax rate remaining the same for the next two years, a retirement plan participant has more options available.
For more information, please contact Wood, Atter & Wolf, P.A., in Jacksonville and Ponte Vedra Beach, Florida.
