Effective Tax Rate: Not As Simple As It Seems

Mitt Romney recently expressed the belief that his effective tax rate is roughly 15 percent. Most people become incredulous upon hearing this claim.

Their initial thought is that most people pay a much higher rate than that.

The reality is that they really don’t, however.

In fact, based on the specific calculation methodology, Mr. Romney’s effective rate is significantly higher than that of most Americans’.

Comprehending why this is true requires understanding that “effective tax rate” does not equate to your maximum income tax bracket. Those rates range between 10 and 35 percent, depending upon gross annual income.

This figure … Read more at 2010 Tax.

Would You Like To Have the IRS Do Your Taxes?

To paraphrase Will Rogers, more liars were made of the American people from income tax than from golf.

But if the IRS made it easy and almost impossible to lie on a tax return, would anyone be interested?

Doug Shulman, the IRS Commissioner, recently hinted that if the IRS would prepare taxpayers’ returns the potential for tax fraud would be reduced. No-one would have to prepare their own returns at tax time because the IRS would do it for them.

The common name for this idea is a “ready return” or “simple return.” The IRS would complete the … Read more at 2010 Tax.

How to Choose Your IRA CD Investment

Many IRA account holders who want to increase their retirement funds in a risk free way look into certificate of deposits. Certificate of deposits are one of the best investments for conservative investors. CDs are considered as money in the bank and there is no way that you will lose your investments as long as you wait for the maturity date. Most CDs are insured by FDIC and CDIC so no matter what happens to the financial institution, you can still get your money back. But despite the fact that CDs are safe, you must still be careful in choosing … Read more at 2010 Tax.

Changes For 2011 Tax Filing

Tax season is upon us and even though the filing deadline is months away we all need to be prepared ahead of time. The required documents for each of us will arrive in the mail in the month of January so everyone who plans to file taxes needs to start preparing files and documents that have tax implications.

New for 2012 is the fact that the The Internal Revenue Service (IRS) gave taxpayers an extra two days to file taxes this year. April 15th falls on a Sunday and the 16th is Emancipation Day (an observed District of Colombia holiday) … Read more at 2010 Tax.

4 Ways to Get the Most out of Your Retirement Budget

As medical technology advances, society becomes safer and health knowledge becomes more mainstream, the life expectancy of humans tends to increase. In 1950, the average lifespan was 68 years. Today, that figure has risen to 78. While people are excited about living longer, quality of life is also an important part of retiring comfortably. Finding ways to stretch your retirement budget will allow you to retire at a normal age without having to sacrifice the hobbies and adventures you enjoy. Here are 4 ways to get the most out of your retirement budget:

1. Create a Financial Strategy

Getting the … Read more at 2010 Tax.

Top 10 Reasons for a Tax Audit

A tax audit can occur for several different reasons that most people are not aware of. You will have to comply with at least two of these factors before you have anything to worry about.

The most popular reason for a tax audit is unreported income. Here, there is a lot of paperwork that must be filled out and completed. When the paperwork contains errors or does not get turned it at all, issues can start to occur. This type of paperwork is also time sensitive and should be received in order to file by January 31st.

Improperly prepared tax … Read more at 2010 Tax.