Question on 2010 tax table!

[mefordis]

Yes, to this point, my father in law tried to tell me to stop taking jobs for my small business because it probably puts "my husband" in a higher tax bracket (because he's the one with the "real" job -- I just stay home and take care of our kids and do my side business which brings in only 30k or so a year).

I was so frustrated with this advice because I KNOW making more money is ALWAYS a good thing, even if you ARE paying higher taxes, right? I could not get him to see my point. I just said, "I know that when I bring in this money we get to take a vacation. Without this money we would not be taking a vacation!

Yup!

We often read (here and elsewhere) about people complaining about a bonus or raise and how they will make less money than before because they are bumped into a new tax bracket. They don't understand that only the "extra" money gets taxed at the new rate. They will be paying more in taxes, but there is no way that the extra money would cause their net income to go down (at least the tax brackets will not cause this).

 

[Music City Mama]

if you search for income tax calculator you might be able to plug everything in and get a answer.

ETA and dont forget all of the bush tax cuts have now expired. kids are only 500 not 1000 so I would not count on a large refund unless the lame ducks can get their stuff in order and put them back in asap.

Incorrect.

The tax cuts will not expire until 12/31/10, so whether the cuts are extended or not will not affect your 2010 tax return.

Yup!

We often read (here and elsewhere) about people complaining about a bonus or raise and how they will make less money than before because they are bumped into a new tax bracket. They don't understand that only the "extra" money gets taxed at the new rate. They will be paying more in taxes, but there is no way that the extra money would cause their net income to go down (at least the tax brackets will not cause this).

Amazing, isn't it? I hear this kind of rubbish all of the time, too.

 

[HelenePA]

The tax cuts will not expire until 12/31/10, so whether the cuts are extended or not will not affect your 2010 tax return.

Whether you get a refund or not depends on how much you have had withheld vs. your total tax obligation for the year, so there's no way to know that based on just knowing your income.

Really? are you sure? I estimated my return and its a whole lot different than last year. We did not make much more we are not in a new bracket but there is a BIG difference nothing else has changed? off to find another calculator.. I usually use H&R blocks one and its been dead on but they dont have the new one up yet and I can't log in to get a copy of last years return that I need to fill out dh's fasfa either.. I'm not happy with them this week

eta Okay I just used hr blocks old one (since nothing has changed) and it gave me a result like last years.. why everyone elses is SOOOO different I dont know.. I was starting to sweat. We are one of those people who like a large return and I need one this year cuz I'm helping pay for my brother's wedding with it.. we have more taken out each week than we should.. yes some of you will yell at me but its just the way we do it..

 

[kiddo76]

Really? are you sure? I estimated my return and its a whole lot different than last year. We did not make much more we are not in a new bracket but there is a BIG difference nothing else has changed? off to find another calculator.. I usually use H&R blocks one and its been dead on but they dont have the new one up yet and I can't log in to get a copy of last years return that I need to fill out dh's fasfa either.. I'm not happy with them this week

Yes, they expire 12/31/10, which means they are in place for all of 2010 income. The fact that you file 2010 income taxes in 2011 doesn't mean you use 2011 tables. You use 2010 tables.

 

[HelenePA]

Yes, they expire 12/31/10, which means they are in place for all of 2010 income. The fact that you file 2010 income taxes in 2011 doesn't mean you use 2011 tables. You use 2010 tables.

Well you made my day... thank you!!! Now I can stop reading cnn at least for a few more months!

 

[Mrs.Toad]

Yup!

We often read (here and elsewhere) about people complaining about a bonus or raise and how they will make less money than before because they are bumped into a new tax bracket. They don't understand that only the "extra" money gets taxed at the new rate. They will be paying more in taxes, but there is no way that the extra money would cause their net income to go down (at least the tax brackets will not cause this).

Yea, there are tons of people who don't seem to understand this.

Okay I just used hr blocks old one (since nothing has changed) and it gave me a result like last years.. why everyone elses is SOOOO different I dont know.. I was starting to sweat. We are one of those people who like a large return and I need one this year cuz I'm helping pay for my brother's wedding with it.. we have more taken out each week than we should.. yes some of you will yell at me but its just the way we do it..

Maybe because it's H&R Block and it has the same mistakes in it that it had last year.

Sorry, former CPA here, who has seen too many messed up returns come out of H&R Block.

 

[HelenePA]

Yea, there are tons of people who don't seem to understand this.

Maybe because it's H&R Block and it has the same mistakes in it that it had last year.

Sorry, former CPA here, who has seen too many messed up returns come out of H&R Block.

Our return is VERY easy, but I do double check with another site before I submit. As long as they totals aren't off by more than 100$ on each site I dont worry. It just easier to keep it all with the same place. no different log ins to worry about no keeping track of who I used what year.. We really dont have more to enter than the kids, & 401ks. next year we will though since he's going back to school...

 

[Bastiansmom]

Are the "income" amounts before or after deductions?
I am starting to panic that we didn't take enough out, although we claim what we have, so it should even out, but unfortunately it doesn't.

 

[Mrs.Toad]

Are the "income" amounts before or after deductions?
I am starting to panic that we didn't take enough out, although we claim what we have, so it should even out, but unfortunately it doesn't.

The tax tables are based on taxable income, after all deductions. Thanks for pointing that out. I assumed the OP was giving her taxable income, but if it's her gross income, she should have an easy time getting down below the 33% bracket. The 13K of property tax, plus personal exemptions alone would do it. Then, mortgage interest, charitable contributions, business dections, etc.

Any available credits would then decrease the tax calculated.

 

[Bastiansmom]

The tax tables are based on taxable income, after all deductions. Thanks for pointing that out. I assumed the OP was giving her taxable income, but if it's her gross income, she should have an easy time getting down below the 33% bracket. The 13K of property tax, plus personal exemptions alone would do it. Then, mortgage interest, charitable contributions, business dections, etc.

Any available credits would then decrease the tax calculated.

Hallelujah!
I was getting worried.......Does any one know what the standard deduction (married, filing jointly) will be?

 

[mefordis]

The tax tables are based on taxable income, after all deductions. Thanks for pointing that out. I assumed the OP was giving her taxable income, but if it's her gross income, she should have an easy time getting down below the 33% bracket. The 13K of property tax, plus personal exemptions alone would do it. Then, mortgage interest, charitable contributions, business dections, etc.

Any available credits would then decrease the tax calculated.

Yes, this is all before deductions. I hope you are right that I can get this below 33%!

 

[AndyLL]

The tax on 230,570 would be 53,869.10

(230,577 - 209,250) = 7,035.60

7,035.60 + 46,833.50 = 53,869.10

If you managed to get your income down to last year's level, say 200,000 even, your tax would be 44,243.50. Only you can decide if it's worth it to you to spend 30,500 to save 9,600. (Of course, if you can do it through retirement savings, it's not really spending, so...)

Not quite right.

(230,577 - 209,250) = 7,035.60 * 33% = 2321.75
2321.75 + 46,833.50 = 49155.25

And people really seem confused about moving up a bracket.... only the amount above the bracket is taxed at the higher rate... in this case on the 7,035 was taxed at 33%.

The extra taxes you would pay by 'moving up' into a higher bracket is $351. (in this case)

I'd happily take the $7025 at a cost of $351.

Now if you have valid ways to get your AGI down like retirement or needed purchases then do it.

But don't go wild spending 7000+ dollars because you think that the $7000 is moving your entire income to a higher tax bracket.

 

[Mrs.Toad]

Not quite right.

(230,577 - 209,250) = 7,035.60 * 33% = 2321.75
2321.75 + 46,833.50 = 49155.25

And people really seem confused about moving up a bracket.... only the amount above the bracket is taxed at the higher rate... in this case on the 7,035 was taxed at 33%.

The extra taxes you would pay by 'moving up' into a higher bracket is $351. (in this case)

I'd happily take the $7025 at a cost of $351.

Now if you have valid ways to get your AGI down like retirement or needed purchases then do it.

But don't go wild spending 7000+ dollars because you think that the $7000 is moving your entire income to a higher tax bracket.

oops, yes, I forgot to include the " x 33%" in my formula, but I had included it in the calculation.

In any event, though, I completely agree that the extra 5% paid on that tiny bit of income that exceeeds 209,250 is not worth going nuts trying to avoid.

 

[mefordis]

Thank you for explaining this! Why is everyone so ignorant of the facts (myself included?!?) when they are so simple once explained clearly, like you did. Why is it perpetuated that it is bad to jump a tax bracket, when in fact it is a GREAT thing to jump a tax bracket! It means you are making more money! Duh!

Not quite right.

(230,577 - 209,250) = 7,035.60 * 33% = 2321.75
2321.75 + 46,833.50 = 49155.25

And people really seem confused about moving up a bracket.... only the amount above the bracket is taxed at the higher rate... in this case on the 7,035 was taxed at 33%.

The extra taxes you would pay by 'moving up' into a higher bracket is $351. (in this case)

I'd happily take the $7025 at a cost of $351.

Now if you have valid ways to get your AGI down like retirement or needed purchases then do it.

But don't go wild spending 7000+ dollars because you think that the $7000 is moving your entire income to a higher tax bracket.