2011 Tax Rates Going Up???
August 2010

One of the most pressing tax planning questions is where are tax rates heading for the year 2011? Because at the end of 2010, all of the tax breaks implemented under President George W. Bush will expire. Among a host of changes, tax rates will revert to their pre-2001 levels, roughly as follows:

Absent any new tax legislation addressing the expiring tax breaks, the 10% tax bracket will be eliminated and collapsed into the 15% bracket; the 25, 28, and 33 percent brackets will be bumped up three percentage points each, and the top 35% rate will rise to 39.6%. The tax rate on long-term capital gains would increase as well, from 15% currently to 20%.

President Obama has proposed to keep the 10% through 28% brackets and to allow the top two tax brackets to increase to 36% and 39.6%, respectively.

-Michael Koziol