Projections/Guesses at 2011 and beyond tax rates

I’ve already done my conversion that I plan to include in my 2010 income. I’m now thinking about increasing the amount in anticapation of the tax increases that will be coming. Anyone have a link or insights into the “likely” rates/brackets for married filers?

Thanks



Federal income tax rates are at historic lows as a result of the Economic Growth and Tax Relief Reconciliation Act of 2001. Because the provisions of the law expire after December 31, 2010, federal income tax rates will increase, unless Congress takes action beforehand. So, the following changes:

10% increases to 15%
15% stays at 15%
25% increases to 28%
28% increases to 31%
33% increases to 36%
35% increases to 39.6%



A key question is how long Obama’s campaign pledge of no new taxes for couples making under 250k will be considered binding. One scenario is that only the 28 and higher brackets will increase in 2011, but the lower brackets may only be safe for another year or two. The state of the economy will also be a factor in the amount and timing of rate increases. And do not ignore the fiscal situation your state may now be in as well.



Thanks for the feedback so far.

Do the breakpoints stay nominally the same ie $137050 for the current 28% which would move to 31% and $208850 for the current 33% which moves to 36%.



The break points are automatically adjusted for inflation, however Congress could make other changes to the tiers for both income and rate if they chose to. Same for the LT cap gain and qualified dividend rates which currently rise at the start of the 25% bracket. Those provisions also end 12/31/2010.



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