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The IRS has set many tax deductions and benefits secure for individuals. Unfortunately, some taxpayers who bring home a higher level of income can see these benefits phased out as their income ascends.

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Determine the interest rate that you've got to pay close to taxable portion of the bond income. Use last year's tax rate, unless your income has changed substantially. For the reason that case, need to estimate what your rate will are. Suppose that anticipate to experience the 25% rate, an individual are calculating the rate for a Treasury bind. Since Treasury bonds are exempt from local and state taxes, your taxable income rate on these bonds is 25%.

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In 2003 the JGTRRA, or Jobs and Growth Tax Relief Reconciliation Act, was passed, expanding the 10% tax bracket and accelerating some of your changes passed in the 2001 EGTRRA.

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