To say that many people got a rude awakening in the last six weeks courtesy of the Internal Revenue Service would be an understatement. Taxes for ordinary income went from a maximum of 36% to 39.6% -- plus a Medicare add-on of 1.45% and health-care reform surtax of .9% for a total of 41.95%. Taxes for long-term capital gains and qualified dividends increased from 15% to 23.8%, including 3.8% for the health-care-reform surtax. Taxable bond interest went from 35% to 43.4%, as did short -term capital gains and non-qualifying dividends. The overall effect was a general tax increase of about 7% to 9% depending on where your income falls.
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