Here Are the 2013 Tax Brackets
$425,001 or more
As my colleague Dan Dzombak pointed out last week, one thing to keep in mind is that the 2013 tax brackets are marginal in nature.
Source: Author's calculations.
The total tax liability in this case would be $16,856, with the lions' share coming from the 15% tax bracket. All things considered, in turn, even though the top marginal rate is 25%, the actual tax liability is 16.9% -- little consolation, I know, but it's a consolation nonetheless.
Among other things, this example demonstrates the importance of maximizing your deductions. And none is more powerful than the deduction allowed for IRA contributions -- the only contender for this crown is perhaps the mortgage interest deduction.
As I illustrated last week, a married couple with $95,000 in combined taxable income could potentially cut their annual tax liability by as much as $2,750
simply by maxing out their annual IRA contribution -- this assumes they qualify for the maximum contribution.
If you have the cash, that's a great deal that shouldn't be passed up.
Either way, however, there's no getting around the fact that tax time is unpleasant. Just keep in mind that it'll be over, one way or another, in a little over two weeks.
Take advantage of this little-known government tax rule
Recent tax increases have affected nearly every American taxpayer. But with the right planning, you can take steps to take control of your taxes and potentially even lower your tax bill. In our brand-new special report "The IRS Is Daring You to Make This Investment Now! ," you'll learn about the simple strategy to take advantage of a little-known IRS rule. Don't miss out on advice that could help you cut taxes for decades to come. Click here to learn more.Source: www.fool.com