Sunday, January 10, 2010

Higher Taxes Likely, even for Those Making Less than $250,000

In his first address to Congress in February, 2009, President Obama famously said, "If your family earns less than $250,000 a year, you will not see your taxes increased a single dime. I repeat: not a single dime."

Recent articles show that reality may be otherwise. The Health Care Tax Pledge in The Wall Street Journal reports that "the health care bills are loaded with taxes on families earning less than $250,000 per year." Tax Alert-Plan to Take Advantage of 2010 , by Bill Losey at highlights tax breaks that will expire for high income taxpayers, and reports that if the Bush tax cuts are allowed to expire, people making under $250,000 will be in higher tax brackets and also paying higher taxes on long term capital gains.

I interpreted President Obama's statement to mean taxes would not be increased for the middle class. However, based on recent legislation and expected expiration of tax cuts, it appears Mr. Obama just meant the increase would not be a single dime, but apparently an increase of hundreds or thousands of dimes has not been ruled out. My preliminary projection of our federal income tax for 2011, show our payments will likely higher than previous years for the same income, and our family makes way less than $250,000 per year.

For more on New Beginnings, check back every Sunday for a new segment.

This is not financial or tax advice. Please consult a professional advisor.

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