Many taxA tax is a mandatory payment or charge collected by local, state, and national governments from individuals or businesses to cover the costs of general government services, goods, and activities. payers are confused about which tax provisions will be affected, and in what way, on Jan. 1, 2011. In just six months, major changes could affect numerous tax provisions, including individual income taxAn individual income tax (or personal income tax) is levied on the wages, salaries, investments, or other forms of income an individual or household earns. The U.S. imposes a progressive income tax where rates increase with income. The Federal Income Tax was established in 1913 with the ratification of the 16th Amendment. Though barely 100 years old, individual income taxes are the largest source of tax revenue in the U.S. rates and credits, the alternative minimum tax, and the estate taxAn estate tax is imposed on the net value of an individual’s taxable estate, after any exclusions or credits, at the time of death. The tax is paid by the estate itself before assets are distributed to heirs. . To help taxpayers with this confusing issue, we have assembled a list of 13 questions on the Bush tax cuts and the uncertainties of 2011 post-expiration tax policy.
Each question addresses one aspect of the tax cuts and possible changes. Questions include ” Who received the biggest tax savings from the tax cuts?,” “What tax provisions expired at the end of 2009 along with the AMT patch, and what are the chances these will once again be extended retroactively?,” and “Can you give me some examples of how families’ income tax bills would change as a result of the tax cuts expiring?“Share