Calculate Your 2011 Income Tax Burden
Since there is a good possibility of the Bush tax cuts expiring, do you know how much your income tax will be in 2011? The Tax Foundation has created a useful tool called the 2011 Income Tax Calculator which estimates your income tax based on tax laws under three scenarios: (1) Bush tax cuts expire, (2) Bush tax cuts extended, and (3) Obama’s budget proposal.
While this calculator may not have all of the tools to take into account all of your unique circumstances (as a business owner, for example), give it a try to see the possible impact on your personal financial plan and budget for 2011. I put a few numbers into their calculator – a married couple with two children and a mortgage earning $280,000 of wages, $5,000 of long-term capital gains, and $4,000 of qualified dividend income should be prepared to pay about $11,000 more tax in 2011 “if Congress fails to act to extend the Bush tax cuts.”
How much extra tax does a married couple pay with no dependents and no mortgage earning $500,000 of wages and/or retirement income, $20,000 of long-term capital gains, and $40,000 of qualified dividend income? Almost $32,000 if Congress allows the Bush tax cuts to expire!
The Las Vegas CPA firm, Wallace Neumann & Verville, welcomes the opportunity to review your personal circumstances, while there is still time, and create a plan to reduce your 2011 income tax burden.