Ow, my aching wallet
... time to face the inevitable. Taxes are going way up in 2011. And not just for those who earn over $200,000. The tax increases will hit businesses AND individuals. Kiplinger.com shares the following predictions on Tax Hikes for 2011.
Probable Hike for Individuals
Probable Hike for Businesses
- Boosts in top marginal rates from 33% and 35% to 36% and 39.6%.
- A higher rate on capital gains and dividends for those ion the top tax brackets. but only for those in the top brackets. They can expect a 20% rate, or higher.
- Caps on itemized deductions for top earners. The push to limit the value of deductions at 28% is receiving opposition from charitable groups, but the government isn't backing down.
- More easings for the alternative minimum tax, but no repeal.
What does it all mean?
- Higher SECA taxes for owners of S Corps and Partnerships.
- New restrictions on worker classification. This IRS wants to crack down on firms that treat employees as contractors to save money.
- An elimination of some tax breaks for big corporations (deduction for domestic production, accelerated depreciation and incentives for foreign income and oil production.)
The time is now to get prepared for 2011. If you're not in compliance with the IRS and you owe money, you must get your debt situation taken care of so you can have money set aside for the next round of taxes. It's a big blow to our finances, but preparation is the key to preventing future IRS issues. Now is a good time to look into working with a tax resolution professional or reputable CPA for handling your tax issues.