2010 Federal Income Tax Brackets (Estimated)
Every year about this time, when the Bureau of Labor Statistics (BLS) releases inflation data, specifically the CPI-U, experts from a variety of magazines and newspapers try to predict what the tax brackets will be the following year. This is possible because many figures in the tax laws are based on inflation, such as the standard deduction, contribution limits for Traditional and Roth IRAs, and the size and placing of the tax brackets themselves.
This year, the Tax Foundation is first out the gate with their prediction that everything will essentially remain the same as inflation was a mere 0.19%. When they performed this exercise in predicting the 2009 federal income tax brackets, they were 100% correct. I’m fairly confident that these numbers will be accurate when the IRS officially announces the tax brackets for 2010.
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One of the reasons I am called the “Wandering” Tax Pro is because once the tax filing season ends I enjoy travel via all methods – car, bus, plane, ship and train (not necessarily in that order). In the days before my uncle went to his final audit, I would pack my bags and we would embark on a transatlantic crossing, often on the QE2. We would also visit the Caribbean or take a train trip in the fall. Unfortunately, none of these trips were tax deductible for a tax accountant or a retiree.
One of my friends recently got a letter in the mail from the IRS and it freaked them out. The first time I got my official coupons for quarterly estimated payments I freaked out a little because all I saw was an official IRS letter that was thick and ominous looking.
Did you know that forty million people don’t file their taxes until the very last week (April 8th to 15th) before the tax filing deadline? I was astounded when I read that statistic. When you consider the average 2008 tax refund will be around $2,975, that’s $119,000,000,000 in refunds sitting in the Treasury until the very last minute. By waiting until the last week, you’re not saving yourself from dealing with taxes, we’re costing ourselves a lot of money!
In the last few weeks I’ve several email and IM conversations with readers who owe tax this year and are concerned they will be penalized for it. In the case of one reader, 

