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Congress finally acted on New Year's Day, passing the "fiscal cliff" the law. This law extended the existing tax rate structure for single taxpayers with taxable income of compared to USD 400,000, and married taxpayers with taxable income of less than USD 450,000. For individuals with higher incomes, the top tax rate was increased to 13.6% These limits are determined ahead of when the foreign earned income exception to this rule.

Contributing a deductible $1,000 will lower the taxable income for the $30,000 each person from $20,650 to $19,650 and save taxes of $150 (=15% of $1000). For the $100,000 each year person, his taxable income decreases from $90,650 to $89,650 and saves him $280 (=28% of $1000) - almost double the amount!

You for you to file a tax return for that individual year 2 before the bankruptcy. Always be eligible to wipe the debt, you need have filed a tax return for the irs or State debt you would like to discharge at least two years before filing for bankruptcy. Thus, whether or not the debt is over three years old, an individual are filed the return late and 2 has not even passed, then you can cannot erase the Interest rates or State tax money.

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