Fw: Tax Changes effective 1/1/2011. Please read this it affects you no matter who you are

I tried to check this out but had no luck.  If you do, please let me know if this isn't true.  I'd LOVE for it to not be true.  This is scary!
Subject: Tax Changes effective 1/1/2011

Please pass this on to everyone!
Subject: TAX changes effective 1/1/2011


 What a great job our elected officials are doing.  How will this affect me? I will spend less, I will have no choice.  So will everyone else.  It doesn't take a brain surgeon to figure out the negative impact of that on the economy.  Hold on folks it's about to get worse, but don't worry Washington is smarter than you and they are not afraid to let you know that.  Everything is going to be okay. Obama said so.

 three great waves
In just four months, on January 1, 2011, the largest tax hikes in the history of America will take effect. 
They will hit families and small businesses in three great waves. 

On January 1, 2011, here’s what happens... (read it to the end, so you see all three waves)... 
      First Wave: 

Expiration of 2001 and 2003 Tax Relief 
In 2001 and 2003, the GOP Congress enacted several tax cuts for investors, small business owners, and families. 
These will all expire on January 1, 2011. 

Personal income tax rates will rise.  

The top income tax rate will rise from 35 to 39.6 percent (this is also the rate at which two-thirds of small business profits are taxed).         The lowest rate will rise from 10 to 15 percent.         All the rates in between will also rise.         
Itemized deductions and personal exemptions will again phase out, which has the same mathematical effect as higher marginal tax rates.   

The full list of marginal rate hikes is below:
  • The 10% bracket rises to an expanded 15%
  • The 25% bracket rises to 28%
  • The 28% bracket rises to 31%
  • The 33% bracket rises to 36%
  • The 35% bracket rises to 39.6%

Higher taxes on marriage and family.   
The "marriage penalty" (narrower tax brackets for married couples) will return from the first dollar of income.   
The child tax credit will be cut in half from $1000 to $500 per child.   
The standard deduction will no longer be doubled for married couples relative to the single level.   
The dependent care and adoption tax credits will be cut. 

The return of the Death Tax. 

This year only, there is no death tax.  (It’s a quirk!) For those dying on or after January 1, 2011, there is a 55 percent 
top death tax rate on estates over $1 million.  A person leaving behind two homes, a business,
 a retirement account, could easily pass along a death tax bill to their loved ones.  Think of the farmers who don’t make much money, but their land, which they purchased years ago with after-tax dollars, is now worth a lot of money.  Their children will have to sell the farm, which may be their livelihood, just to pay the estate tax if they don’t have the cash sitting around to pay the tax.  Think about your own family’s assets.  Maybe your family owns real estate, or a business that doesn’t make much money, but the building and equipment are worth $1 million.  Upon their death, you can inherit the $1 million business tax free, but if they own a home, stock, cash worth $500K on top of the $1 million business, then you will owe the government $275,000 cash!  That’s 55% of the value of the assets over $1 million!  Do you have that kind of cash sitting around waiting to pay the estate tax? 

Higher tax rates on savers and investors. 
The capital gains tax will rise from 15 percent this year to 20 percent in 2011.   
The dividends tax will rise from 15 percent this year to 39.6 percent in 2011.   
These rates will rise another 3.8 percent in 2013. 

Second Wave: 
Obama care 
There are over twenty new or higher taxes in Obama care. Several will first go into effect on January 1, 2011.  They include: 

The "Medicine Cabinet Tax" 
Thanks to Obama care, Americans will no longer be able to use health savings account (HSA), flexible spending account (FSA), or health reimbursement (HRA) pre-tax dollars to purchase non-prescription, over-the-counter medicines (except insulin). 
The "Special Needs Kids Tax" 
This provision of Obama care imposes a cap on flexible spending accounts (FSAs) of $2500 (Currently, there is no federal government limit). There is one group of FSA owners for whom this new cap will be particularly cruel and onerous: parents of special needs children.   

There a
re thousands of families with special needs children in the United States , and many of them use FSAs to pay for special needs education. 
Tuition rates at one leading school that teaches special needs children in Washington , D.C. ( National Child Research Center ) can easily exceed $14,000 per year. 
Under tax rules, FSA dollars cannot be used to pay for this type of special needs education. 
The HSA (Health Savings Account) Withdrawal Tax Hike. 
This provision of Obama care increases the additional tax on non-medical early withdrawals from an HSA from 10 to 20 percent, disadvantaging them relative to IRAs and other tax-advantaged accounts, which remain at 10 percent. 

Third Wave: 
The Alternative Minimum Tax (AMT) and Employer Tax Hikes 
When Americans prepare to file their tax returns in January of 2011, they'll be in for a nasty surprise-the AMT won't be held harmless, and many tax relief provisions will have expired. 
The major items include: 
The AMT will ensnare over 28 million families, up from 4 million last year. 
According to the left-leaning Tax Policy Center , Congress' failure to index the AMT will lead to an explosion of AMT taxpaying families-rising from 4 million last year to 28.5 million.  These families will have to calculate their tax burdens twice, and pay taxes at the higher level.  The AMT was created in 1969 to ensnare a handful of taxpayers. 
Small business expensing will be slashed and 50% expensing will disappear. 
Small businesses can normally expense (rather than slowly-deduct, or "depreciate") equipment purchases up to $250,000.   

 will be cut all the way down to $25,000.  Larger businesses can currently expense half of their purchases of equipment.   

In January of 2011,
 all of it will have to be "depreciated." 
Taxes will be raised on all types of businesses. 
There are literally scores of tax hikes on business that will take place.  The biggest is the loss of the "research and experimentation tax credit," but there are many, many others. Combining high marginal tax rates with the loss of this tax relief will cost jobs. 
Tax Benefits for Education and Teaching Reduced. 
The deduction for tuition and fees will not be available.  

Tax credits
 for education will be limited.   

Teachers will no longer be able to
 deduct classroom expenses.  

Coverdell Education Savings Accounts
 will be cut.  

Employer-provided educational assistance is

The student loan interest deduction will be disallowed
 for hundreds of thousands of families. 
Charitable Contributions from IRAs no longer allowed. 
Under current law, a retired person with an IRA can contribute up to $100,000 per year directly to a charity from their IRA.   

 contribution also counts toward an annual "required minimum distribution."  This ability will no longer be there. 

PDF  Version  Read more: <http://www.atr.org/six-months-untilbr-largest-tax-hikes-a5171%3E;; http://www.atr.org/six-months-untilbr-largest-tax-hikes-a5171##ixzz0sY8waPq1 
And worse yet? 
Now, your insurance will be INCOME on your W2's! 
One of the surprises we'll find come next year, is what follows - - a little "surprise" that 99% of us had no idea was included in the "new and improved" healthcare legislation . . . the dupes, er, dopes, who backed this administration will be astonished! 
Starting in 2011, (next year folks), your W-2 tax form sent by your employer will be increased to show the value of whatever health insurance you are given by the company. It does not matter if that's a private concern or governmental body of some sort.   

If you're retired?  So what... your gross
 will go up by the amount of insurance you get. 
You will be required to pay taxes on a large sum of money that you have never seen.  Take your tax form you just finished and see what $15,000 or $20,000 additional gross does to your tax debt.  That's what you'll pay next year.   

 many, it also puts you into a new higher bracket so it's even worse. 

This is how the government is going to buy insurance for the15% that don't have insurance and it's only part of the tax increases. 
Not believing this???  Here is a research of the summaries..... 
as modified by sec. 10901) Sec.9002  "requires employers
 to include in the W-2 form of each employee the aggregate cost of applicable employer sponsored group health coverage that is excludable from the employees gross income." 

Joan Pryde is the senior tax editor for the Kiplinger letters. Go to Kiplingers and read about 13 tax changes that could affect you.  Number 3 is what is above. 

Why am I sending you this?  The same reason I hope you forward this to every single person in your address book. 
People have the right to know the truth because an election is coming in November!


Anonymous said...

Ah good, someone is finally talking about the Bush tax hike. Kind of a dick move by him and his Republican colleagues to not make their tax cuts permanent. If they are so great, why do they expire at all? Well its quite simple you see: if they had made them permanent in the first place, they would be required to account for the lost income in the national budget. So instead they made them only last 10 years, which allowed them to drain the national treasury for the benefit of the top 1% while at the same time continue to spend like drunken sailors.

And now they get to blame Obama for the exploding national debt which was moslty their fault! Its a win-win-lose situation. They win, their rich masters win, and we lose.

In addition, the last scary tax listed (insurance on your W2s) has already been debunked several times. But I know wingnuts won't let that stop them from spreading the lie again and again and again.

Anonymous said...

All those tax breaks from 2001 and 2003 did such a great job keeping our economy humming, that we really need to keep it up huh?

He he, I guess I'm one of the lucky ones. Thanks to the Republican Recession, I am already in a smaller tax bracket.

CharlieE said...

I tried to check this out but had no luck. If you do, please let me know if this isn't true.

Consider yourself notified. The tax hikes were signed into law by George W. Bush. Your health insurance costs will not be taxed as income.

You're welcome.

ferschitz said...

Clearly David Koch doesn't want any tax increases on his "small businesses" or himself.

Kochs would rather pay off his PR propoganda machine to send this lying drivel out to braindead t-tardz who'll believe it.

Works for the zillionaires... not so much for the rest of us, including t-tardz.

Marc with a C said...

Jesus. It's like this right-wing forward was written by the people who root for the Sheriff of Nottingham rather than Robin Hood.

Ie. the same squealing peasants who claim that robbing from the rich and giving to the poor will force their tired and hard-working Manor Lord to let them go.

Marc with a C said...
This comment has been removed by the author.
Marc with a C said...

Also, for what it's worth, there are actual exemptions built into the estate tax that specifically address the issue of family farms and small businesses.

As it stood in 2000, less than 2% of American inheritances fell under the estate tax, ie. those worth more than $675,000. As of 2004, the estate taxes only impacted about 1% of American estates, those worth more than $1.4 million. Eliminating the estate tax would cost the U.S. over $70 billion a year.

And so, it's basically a fight over a large amount of money held by a very small group of people. And, as far as I am concerned, the only war worth fighting is the class war.

Anonymous said...

Snopes discussion thread

The tax brackets they cite are complete bunk. In the current tax brackets, the 10% bracket goes to $8,350, while $70,000 is 28% (for couples). But in the proposed 2011 brackets, up to $70,000 would only be taxed at 15%!

But why are we raising taxes? Because the Bush tax cuts are unsustainable. Check out a recent CBO report. Look at the chart at the bottom of the page that notes our federal debt burden if we extend the tax cuts.

Marc with a C said...

Also, the farm issue is bunk. When a farm is assessed for the purposes of estate tax, the land is assessed not at its commercial value (ie. how much it'd be worth if you put a strip mall on it), but at how much it is worth as farmland (ie. how much it's bringing you in). Therefore, it is impossible for a farm to have "land that is worth a lot of money, but doesn't make that much income."

Also, when it comes to filing an estate tax on farms, the executor has a grievance period which can last up to 4 years, and then 10 years to pay the tax, so...in theory, farmers' kids have 14 years to pay the tax.

Anonymous said...

"Jesus. It's like this right-wing forward was written by the people who root for the Sheriff of Nottingham rather than Robin Hood."

Clearly, Marc with a C didn't get the memo on the good Sheriff. He was just trying to protect the decent, law abiding rich from the dishonest riff-raff who deserved to starve because they were a bunch of lazy queer immigrants. Robin Hood was a worthless meddling liberal who had a negative impact on the profit margins of the rich - I mean, who ruined the economy.

Also, while we're at it, the liberals have corrupted the story of Jesus as well. Jesus actually cared about policing gay sex and punishing people...until some liberals twisted the story around and put in all that nonsese about the poor.

(Sheesh, do I have to explain EVERYTHING to you people?)

cpa dallas texas said...

Effective tax rates represent the situation not for particular taxpayers but that for groups of taxpayers with similar amounts of adjusted household income. It equal the taxes paid by or imputed to households divided by their pretax income. Thanks a lot.

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