Get ready for a lot of higher taxes on January 1, 2011:
Expiration of the Bush Tax Cuts
– All income tax rates will be increased: The top bracket increases from 35% to 39.6%, but the bottom bracket (for the poorest) will actually increase the most–from 10% to 15%, or a 50% increase. The marriage penalty returns, and itemized deductions, personal exemptions, and child tax credits will phase out. Go to Bush Tax Cuts to see how much your taxes will increase, and to see the new tax tables.
– The capital gains tax will increase from 15% to 20%.
– The dividends tax will increase from 15% 39.6%.
Other Tax Hikes
– There is currently no estate tax, but beginning in 2011, the estate tax of up to 55% will return, for multimillion-dollar estates.
– HSA and FSA accounts will no longer be able to use pre-tax dollars to purchase non-prescription medicines (except for insulin).
– Businesses could lose many tax credits.
– Tax credits for education and deductions for tuition and student loan interest may be limited or eliminated.
– Charitable Contributions from IRAs (Required Minimum Distributions) may no longer be allowed.