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.

Make Filing Your 2010 Tax Return As Easy As Possible

It is that time of year again; your 2010 tax filing will be due in April. Which we all know can sneak up on us much faster than it seems like it should. Fortunately, there are some great tips to help you be prepared for your income taxes, straight from the IRS. First, it is important that you start gathering all of the necessary information and paperwork now. It can often be time consuming to find all of your receipts and documentation that you will need when filing. So it is best to start looking for them and getting them … Read more at 2010 Tax.

How to Acquire a Federal Income Tax Refund

‘You are entitled to an income tax refund’ – these are words that would be music for any taxpayer’s ears. A taxpayer enjoys a federal income tax refund if the amount of the pending payable tax is smaller than the total of the refundable tax credits claimed and withholding paid. A lot of individual taxpayers can obtain federal income tax returns through earned Income credit, as refund of overpayment of tax for one or several years. However, not every taxpayer is happy with the concept of a large income tax refund. … Read more at 2010 Tax.