IRA, Roth IRA, 401k, 401k rollover
Tax brackets are categories of amounts of income taxed. If you make between 0 and roughly 8,500 dollars of taxable income a year, for example, you would be in the 10 income tax bracket. Tax filing for 2010 begins in 2011. If you want to figure out what your 2010 tax bracket is, you just need to add up your taxable income. Remember that your taxable income is your income minus any deduction. If you are self-employed, there are a number of deductions you can make for your office, your car, work expenses, etc. See a professional who files taxes to help you make wise tax choices. If your taxable income falls between any of the following figures, then that is the tax bracket you are in and the tax rate you will pay for that year.
If your taxable income is 0 to 8375 then your tax bracket is 10
If it is from 8375 to 34,000 then you pay the 15 income tax rate
If your income is from 34,000 to 82,400, you will be in the 25 bracket
If from 82,400 to 171,850, you will pay 28 on your taxable income
You may be wondering if your tax will take a sharp upward climb if you change to any of the higher 2010 tax brackets. The answer is that not all your income will be taxed at the higher tax bracket rate. If you make 5000 dollars above the figure that would keep you in the 10 bracket, you will only pay 15 on the 5000 dollars that is in the 15 bracket and 10 on the rest. In addition, long-term qualifying dividends and capital gains such as IRA, Roth IRA, and 401k plans are not part of your ordinary income and are taxed separately or not taxed at all in some cases. Just be sure that your new plan qualifies for a zero percent tax if you have to do a 401k rollover.
