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on the radio with Paul Petillo
Join Paul Petillo, Dave Kittredge and Dave Ng every week on Financial Impact Factor Radio as they to discuss everything from retirement to insurance, investing to estate planning, from getting started to preparing to stop.
books by Paul Petillo
I just published my fifth book - this time with Smashwords! ReBuilding Wealth in a Paycheck-to-Paycheck World by Paul Petillo, copyright 2011 This ebook is available across all platforms including iPad and iPhone, Amazon and Sony.
on personal finance
In the world of personal finance, asking what's the worst that could happen is not the same as asking: "will I be able to afford this?" or "have I saved enough for retirement?"
More personal finance
on retirement
The Who, What, When, Where and Why of Retirement
If things are good, for some they won't be good enough. If it turns out that things are not so good, someone will ultimately benefit for this off-chance negativity.
More on retirement planning
on mortgages
American dream or not, the games you may have once played with financing your home are not available for the vast majority of homeowners.
More on mortgages and homes
on insurance
Insurance : Life, Health, Auto, Home
Is the insurance industry the next victim of the financial crisis?
Health Channel
on investing
The mutual fund investor has a great many more options available to them in the post-Great Recession marketplace. The question is: are they right for you as you make a retirement plan using 401(k)s or IRAs?
More on investing
on twitter @PaulPetillo
special features
Zack's Investment Tools: Stock Screener or Mutual Fund Screener
Calculators
Privacy Policy
Ad Policy
Our recent financial discussions
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tax rates 2007
Tax Rates 2007
Married filing Separately
| If
Taxpayer's Income Is... |
Then
Estimated Taxes Are... |
| Between
|
But
Not Over |
Base
Tax |
+
Rate |
Of
the Amount Over |
| $0 |
$7,825 |
$0 |
10% |
$0 |
| $7,825 |
$31,850 |
$782.50 |
15% |
$7,825 |
| $31,850 |
$64,250 |
$4,386.25 |
25% |
$31,850 |
| $64,250 |
$97,925 |
$12,486.25 |
28% |
$64,250 |
| $97,925 |
$174,850 |
$21,915.25 |
33% |
$97,925 |
| $174,850 |
-
- - - - |
$47,300.50 |
35% |
$174,850 |
Do You Know Your Tax Rate?
My late father was fond of saying, "you knew you were making money if you were paying taxes". And as true as that is, it doesn't make it any easier to swallow nor do you have to pay more than you should.
Accomplished investors should base their success on an ability to manage the tax implications of their portfolio. Although not all do. For those of us whose portfolios could use a little help, taxes are often not even considered unless they result in penalties (as in 'for early withdrawals'). Taxes however are an important and necessary consideration when it comes to how and where you take gains from those investments.
As our investments grow, so does the reach of the revenue branch of the government. Proper handling of how your investments are positioned puts more money in your pocket. One of the first steps towards that end comes with understanding your tax bracket.
Just to update you on the existing tax brackets, your last earned dollar is taxed at the following rate: 10, 15, 25, 28, 33 or 35%. To put that in better prospective, a couple, filing as married and jointly can have an income of $58,100 and reside comfortably in the 15% bracket. Their actual earnings may be higher but because this couple probably had deductions for a home, kids, etc., their income was taxed at the lower rate. But one dollar more would be taxed at the next rate up the line - 25%.
Often that additional income comes by way of an investment. Take a 10% return on a hypothetical $1,000 and tax it at 25% and the return is reduced to 7.5%.
This kind of error in thinking is as common as it is complicated to fix. It is important to remember some recent changes in the tax law. Now dividends, the kickback shareholders get for their loyalty to a cash-rich company, will be taxed at the 15% rate no matter what bracket your income is taxed. That 15% limit also applies to long term gains. Long term, in this case, refers to people who buy and hold a stock for twelve months or longer.
If you are a single...
If you are a Married filing Joint returns...
If you are a Married filing Separately...
If you are a Head of Household...
bluecollardollar: from the blog
One is a Lonely Number: A Retirement Plan
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