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Question:


Where can I find out what my tax rate is? Do these rates traditionally hold steady or do they increase annually?
-NatalieS


Answer:


Federal income tax rates haven’t changed since they were lowered about a decade ago, although the income levels at which different rates kick in tend to rise each year in line with inflation. For 2012, the first $8,700 of adjusted gross income for single filers, or twice that if you’re married and file jointly, is taxed at 10 percent. Income from those levels up to $35,350 or $70,700 is taxed at 15 percent, depending on your filing status. After that there are bands in which income is taxed at 25 percent, 28 percent, 33 percent and 35 percent. Here’s a link to the full tax table...
 
Don’t get too comfortable with those rates. They’re due to expire at the end of 2012, although Congress could extend them. If no action is taken, the top rate could rise from 35 percent to 39.6 percent. Tax rates on capital gains and dividends are due to rise even more substantially without congressional action, and the two-percentage-point reduction in employees’ payroll taxes in force since the beginning of 2011 is scheduled to be eliminated too. To top it off, an additional 3.8 percent tax is due to be imposed on investment gains for high earners to help pay for the national health care overhaul.
-Conrad de Aenlle



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