Impact Of Expiring Tax Provisions In 2011 On Small Businesses
Small business owners could be in for what’s effectively a wave of new taxes next year. I’m not talking about taxes relating to health care reform, but to the fact that many of the tax cuts put into effect in 2001 and 2003 (some people call them the “Bush tax cuts”) are due to expire January 1, 2011.
The taxes affect investors, small business owners and individuals. Here’s a look at some of the changes:
Personal income tax rates will increase. The top income tax rate (the rate at which two-thirds of all small business profits are taxed) will go from 35 to 39.6 percent. Here is the full list of marginal rate hikes:
- The 10 percent bracket rises to15 percent
- The 25 percent bracket rises to 28 percent
- The 28 percent bracket rises to 31 percent
- The 33 percent bracket rises to 36 percent
- The 35 percent bracket rises to 39.6 percent
The Alternative Minimum Tax (AMT) will also affect more families—an estimated 28.5 million, or 4 million more than last year.
Read Full Article: What You Need to Know About Small Business Tax Provisions Expiring in 2011
