Individual Tax

Important Changes in 2010 For Arizona Residents

The Arizona Dept. of Revenue has changed the income tax withholding method for individuals. The new method uses a direct percentage of taxable income as the withholding rate. For persons earning more than $15,00 annually, the rates are 1.8%, 2.7%, 3.6%, 4.2%, and 5.1%. You may also make additional fixed dollar amounts.

The new AZ withholding rates start July 1, 2010. You may download the new AZ A-4 withholding form at the link below on this page.

If you are uncertain how much to withhold, the following calculation is a quick ballpark method. Look at your 2009 AZ tax return and find the tax liability on line 25. Divide the AZ tax liability by the amount of earned income from all W-2's Box 1 wages. Compare this percentage amount with the rates listed on form A-4. Choose a rate slightly higher than your calculated rate if you do not wish to owe taxes at year end. If you receive a lot of income not reported on W-2's, see your tax advisor on the best way to do Arizona withholding.

IRS releases automobile mileage rates for year 2011.

The IRS has set the following standard mileage rates for year 2011. Business mileage rate is 51 cents/mile. Moving and medical mileage is 19 cents/mile. Charitable travel remains 14 cents per/mile.

Marginal Tax Bracket Changes for 2010.

The personal exemption rate remains $3,650. The standard deduction for single taxpayers, head of household, and married filing joint respectively will be $5,700, $8,400, $11,400. The marginal tax rates appear in next table.

Marginal Rates	Single	HH	MFJ
	2010 Inc.	2010 Inc.	2010 Inc.
10.0%	0 - 8,375	0 - 11,950	0 - 16,750
15.0%	8,376 - 34,000	11,951 - 45,550	16,751 - 68,000
25.0%	34,001 - 82,400	45,551 - 117,650	68,001 - 137,300
28.0%	82,401 - 171,850	117,651 - 190,550	137,301 - 209,250
33.0%	171,851 - 373,650	190,551 - 373,650	209,251 - 373,650
35.0%	>373,650	>373,650	>373,650

Need a W-4 form? Download a W-4 Form here. Need an AZ A-4 withholding form? Download an A-4 Form here.

Is Your 2011 W-4 Withholding Correct?

Now is a good time to tune up your federal income tax withholding for 2011. By doing a quick pro-forma tax return we can estimate your tax liability for the year 2011 and estimate the withholding liability for 2010. This estimate will help us determine whether your withholding is correct.

Setting your withholding rate correctly at the beginning of the year can put more money in your wallet. On the other hand, if you have under withheld, adjusting your withholding rate early can avoid those April 15'th blues.

Request a pro-forma tax questionnaire. We'll use the questionnaire results to determine your W-4 withholding rate. It is simple and very inexpensive. Remember, Uncle Sam does not pay interest on your overpayment.