Computing federal income tax for 2010

[kip_russell]

every quarter or so I revisit my budgeting and personal finance spreadsheets to vet them against my pay stubs, any IRS or insurance changes, etc. at the end of the year I use the published IRS tables to forecast my tax burden for the upcoming year. I am sure most perform a similar duty in some fashion or another. my income has not changed from 2009 into 2010, nor my withholding, marital status, etc. I found that beginning in 2010 my semi-monthly federal income tax liability in the 15% bracket will increase by approximately $26. this is an annual increase of $624. I really thought that my federal income taxes would be lower in 2010. thoughts?

[racaulk]

1. Without knowing your personal situation or seeing the details of your calculations,

I can't say for sure. There could be any number of factors that are affecting your personal tax liability that I am unaware of, based on the limited information provided in the scenario in your OP.

One thought: Did you update the standard deduction (assuming you don't itemize) and personal and dependency exemptions for your calculations for 2010? These are indexed for inflation each year, and if you're still using the same numbers from 2009, this may account for part of the increase.

[kip_russell]

3. I just used the tables

to compute my semi-monthly withholding .. on second reading I think that I should have used that phrasing instead of tax liability. I am mostly concerned with the amount of money I can keep from each paycheck. you have provided a new look into my reasoning in that perhaps even though the wit holding amount may have increased my actual liability may not - something I most likely won't know fully until things play out in 2010.

[FBaggins]

2. There's a difference between your tax liability and what is withheld.

You may remember that one of the "stimulus" plans attempted to get money out by adjusting the tables for withholding from your income. I suspect that what you're seeing is the removal of that stimulus.

[kip_russell]

4. a good point that I have learned

thanks!