For the year 2014 the IRS has came out with the newest and latest tax brackets. Every year there are new additions to the tax laws and therefore it is important for people to know how much they will owe during the year. With the new tax brackets, people will have a source of reference to know the exact changes to the tax laws and therefore have a better understanding of how much they will need to pay for this particular year. In the year 2014 there are some new changes to the brackets. These new changes mean that individuals and businesses will have diffferent tax liabilities for the year. The main change in the tax brackets for 2014 is the income tax rate. For the last ten years the tax rates have ranged from 10% to 35%. This was the range of tax brackets during the Bush Tax cut era. However the current President Obama has proposed a revision in the tax code to increase the tax rates for everyone starting in 2014. The first group of people to be effected by this tax bracket change is people earning more than $250,000 per year. Since the government is looking to deal with a deficit it needs more money and will therefore tax the rich more. With the new tax bracket change for 2014, people making $250,000 or more per year will need to pay at a rate of up to 39.6 percent.
With the new tax brackets, the next group of people to be effected by the tax bracket change are those who are making less than $250,000 per year. In this scenario the individuals at the tax bracket below the highest one previously mentioned will have an increase in tax payments from 33 to 35%. As a result these people will need to pay more than what they have over the last 12 years. These people are one’s who typcially make between $100,000 to $249,999 per year.
These new tax brackets will also make an increase on people who earn less than $100,000 per year as well. With the new tax brackets, those who make under $100,000 per year will need to pay anywhere between 15 to 28%. This is also a considerable increase from previous years. The new tax brackets will effect the middle class and therefore it is important for them to be aware of this so that they can better plan their finances during the year.
Another thing to keep in mind with the 2014 tax brackets is that, the Obamacare policy will go into effect. This means that those without health insurance will need to pay an additional tax of up to $700 per year. With this policy, these individuals will have this extra tax regardless of their income tax bracket.
These new tax law changes are being made in order to help the government deal with a deficit and also help better fund for things such as defense and infrastructure. Having an increase in taxes can potentially help the nation improve its standard of living and be able to meet the needs of many people as well. The new tax brackets are a change that can be for the better over the next several years starting in 2014.