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| Tax and Financial Tables |
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These tax planning tables are a handy reference and are provided based on internal and external sources that are considered reliable. Specific questions that relate to your individual situation should be directed to your advisor.
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| Trust and Estate Income Tax Rates : 2008 |
|
|
| TAXABLE INCOME |
| Over |
 |
But Not Over |
|
Pay |
|
+ % on Excess |
|
Of the Amount Over |
 |
| $0 |
|
2,200 |
|
$0.00 |
|
15 |
|
$0 |
|
| 2,200 |
|
5,150 |
|
330.00 |
|
25 |
|
2,200 |
|
| 5,150 |
|
7,850 |
|
1,067.50 |
|
28 |
|
5,150 |
|
| 7,850 |
|
10,700 |
|
1,823.50 |
|
33 |
|
7,67,85050 |
|
| 10,700 |
|
|
|
2,764.00 |
|
35 |
|
10,700 |
TOP |
| Estate and Gift Tax |
|
|
Compute the tentative tax from the first table below, then apply the applicable credit from the second table. For example, assume an individual dying in 2008 with a $5 million estate: The tentative tax is $2,130,800; the applicable credit is $780,800; and the estate tax due would be $1,350,000.
First Step: Tentative Estate* or Gift** Tax
| TAXABLE ESTATE |
|
2007 TENTATIVE TAX (before credits) |
| Over |
|
But Not Over |
|
Pay |
|
% |
|
Of the Amount Over |
|
| $1,000,000 |
|
$1,250,000 |
|
$345,800 |
|
41% |
|
$1,000,000 |
|
| 1,250,000 |
|
1,500,000 |
|
448,300 |
|
43% |
|
1,250,000 |
|
| 1,500,000 |
|
2,000,000 |
|
555,800 |
|
45% |
|
1,500,000 |
|
| $2,000,000 or more |
|
780,800 |
|
45% |
|
2,000,000 |
* Under current law, the estate tax is repealed for the year 2010 only.
**In 2010 only, the gift tax rate is 35%; the rates shown above do not apply.
Second Step: Applicable Credit
| CREDIT / EXCLUSION FOR ESTATE TAXES |
| Year |
|
Applicable Credit |
|
Applicable Exclusion* |
|
| 2006 - 2008 |
|
$780,800 |
|
$2,000,000 |
|
| 2009 |
|
1,455,800 |
|
3,500,000 |
|
| 2010 |
|
Not Applicable - estate tax repealed |
|
| 2011 and thereafter |
|
345,800 |
|
1,000,000 |
| CREDIT/EXCLUSION FOR GIFT TAXES |
| 2006 and thereafter |
|
345,800 |
|
1,000,000 |
* The exclusion is the amount that can be transferred without tax because of the credit. Note the difference between the gift tax and estate tax exclusion.
Gift Tax Annual Exclusion
| Each individual may transfer up to $12,000 per person per year to any number of beneficiaries (family or non-family), without paying gift tax or "using up" any available credits. |
TOP |
| Income Tax Rates : 2008 Corporations |
|
|
| TAXABLE INCOME |
| Over |
|
But Not Over |
|
Pay |
|
+ % on Excess |
|
Of the Amount Over |
|
| $0 |
|
$50,000 |
|
$0.00 |
|
15 |
|
$0 |
|
| 50,000 |
|
75,000 |
|
7,500 |
|
25 |
|
50,000 |
|
| 75,000 |
|
100,000 |
|
13,750 |
|
34 |
|
75,000 |
|
| 100,000 |
|
335,000 |
|
22,250 |
|
39 |
|
100,000 |
|
| 335,000 |
|
10,000,000 |
|
113,900 |
|
34 |
|
335,000 |
|
| 10,000,000 |
|
15,000,000 |
|
3,400,000 |
|
35 |
|
10,000,000 |
|
| 15,000,000 |
|
18,333,333 |
|
5,150,000 |
|
38 |
|
15,000,000 |
|
| 18,333,333 |
|
|
|
6,416,667 |
|
35 |
|
18,333,333 |
Note: There are no special capital gains rates for corporations. Corporations pay alternative minimum tax at a 20% rate.
TOP |
| Income Tax Rate Schedules : 2008 |
|
|
Married Taxpayer Filing Jointly / Surviving Spouse
| TAXABLE INCOME |
| Over |
|
But Not Over |
|
Pay |
|
+ % on Excess |
|
Of the Amount Over |
|
| $0 |
|
$16,050 |
|
$0.00 |
|
10 |
|
$0 |
|
| 16,050 |
|
65,100 |
|
1,605.00 |
|
15 |
|
16,050 |
|
| 65,100 |
|
131,450 |
|
8,962.50 |
|
25 |
|
65,100 |
|
| 131,450 |
|
200,300 |
|
25,550.50 |
|
28 |
|
131,450 |
|
| 200,300 |
|
357,700 |
|
44,828.00 |
|
33 |
|
200,300 |
|
| 357,700 |
|
No limit |
|
96,770.00 |
|
35 |
|
357,700 |
Single Taxpayer
| TAXABLE INCOME |
| Over |
|
But Not Over |
|
Pay |
|
+ % on Excess |
|
Of the Amount Over |
|
| $0 |
|
8,025 |
|
$0.00 |
|
10 |
|
$0 |
|
| 8,025 |
|
31,850 |
|
802.50 |
|
15 |
|
8,025 |
|
| 31,850 |
|
78,850 |
|
4,481.25 |
|
25 |
|
31,850 |
|
| 78,850 |
|
164,550 |
|
16,056.75 |
|
28 |
|
78,850 |
|
| 164,550 |
|
357,700 |
|
40,052.25 |
|
33 |
|
164,550 |
|
| 357,700 |
|
No limit |
|
103,791.75 |
|
35 |
|
357,700 |
Head of Household
| TAXABLE INCOME |
| Over |
|
But Not Over |
|
Pay |
|
+ % on Excess |
|
Of the Amount Over |
|
| $0 |
|
11,450 |
|
$0.00 |
|
10 |
|
$0 |
|
| 11,450 |
|
43,650 |
|
1,145 |
|
15 |
|
11,450 |
|
| 43,650 |
|
112,650 |
|
5,975 |
|
25 |
|
43,650 |
|
| 112,650 |
|
182,400 |
|
23,2250 |
|
28 |
|
112,650 |
|
| 182,400 |
|
357,700 |
|
42,755 |
|
33 |
|
182,400 |
|
| 357,700 |
|
No limit |
|
100,604 |
|
35 |
|
357,700 |
Taxable income is income after all deductions (including either itemized deductions or the standard deduction) and exemptions.
Standard Deductions
| Married / Joint |
|
Single |
|
Head of Household |
|
Dependents |
|
| $10,900 |
|
$5,450 |
|
$8,000 |
|
$900* |
Deductions may be reduced when adjusted gross income (AGI) exceeds $159,950.
* If dependent has earned income, deduction is greater of $900 or earned income+$300 (up to $5,450).
An additional standard deduction of $1,050 is allowed for each married elderly** or blind individual. If elderly and blind, the additional standard deduction is $2,100. Single individuals (elderly or blind) are allowed an additional standard deduction of $1,350. If single individual is elderly or blind, additional standard deduction is $2,700.
**Aged 65 or over.
Personal and Dependency Exemptions $3,500
| Phaseouts |
|
Exemption Reduced When AGI Exceeds |
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| Married / Joint |
|
$239,950 |
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| Single |
|
159,950 |
|
| Head of Household |
|
199,550 |
| Married/Separate |
|
119,975 |
TOP |
| Capital Gains and Losses |
|
|
|
|
10% and 15%
Tax Brackets |
|
25% or Higher
Tax Brackets |
|
| Short-Term (one year or less) |
|
Ordinary rate |
|
Ordinary rate |
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| Long-Term (longer than one year) |
|
0%* |
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15% |
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| Dividends |
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Qualified dividends are taxed as long-term net capital gains. Nonqualified dividends are taxed at ordinary income tax rates. |
* To the extent taxable income remains in 15% bracket. Long-term capital gains in excess of 15% bracket are taxed at a 15% maximum.
Netting Capital Gains and Losses
| 1. |
|
Net short-term gains and short-term losses. |
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| 2. |
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Net long-term gains and long-term losses. |
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| 3. |
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Net short-term against long-term. |
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| 4. |
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Deduct up to $3,000 of excess losses against ordinary income per year. |
|
| 5. |
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Carry over any remaining losses to future tax years. |
TOP |
| Alternative Minimum Tax (AMT) |
|
|
| AMT Income |
|
Tax (%) |
|
| Up to $175,000 |
|
26 on this portion |
|
| Over $175,000 |
|
28 on this portion
above $175,000 |
TOP |
| Tax Credit For Dependent Children |
|
|
| 2006 |
|
Modified Adjusted Gross Income (MAGI) |
|
Tax Credit for Each Child Younger Than Age 17 |
|
|
| Married / Joint |
|
$0 - $110,000 |
|
$1,000 |
|
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| Individual |
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0$ - $75,000 |
|
1,000 |
TOP |
| Spending Guidelines |
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| Mortgage payments |
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Not to exceed 28% of monthly after-tax income |
|
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| Discretionary expenses (clothing, entertainment, restaurants, etc.) |
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Not to exceed 20% of monthly after-tax income |
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| Auto loans and credit card debt |
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Not to exceed 20% of monthly after-tax income |
|
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| Combined monthly debt |
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Not to exceed 36% of monthly gross (pretax) income |
TOP |
| Education Planning |
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|
Estimated Annual College Costs
|
|
Public* |
|
Private* |
|
| 2008 |
|
$17,336 |
|
$35,374 |
|
| 2013 |
|
23,199 |
|
47,338 |
|
| 2018 |
|
31,046 |
|
63,349 |
|
| 2023 |
|
41,547 |
|
84,776 |
* Total yearly costs for in-state tuition, fees, books, room and board, transportation, and miscellaneous expenses. Base is 2007-2008 school year. Costs for all future years assume a 6% increase per year.
Education Savings Accounts
| • |
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Maximum nondeductible contribution is $2,000* per child, per year. |
|
| • |
|
Must be established for the benefit of a child younger than the age of 18. |
|
| • |
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Maximum contribution amount is lowered if a contributor's modified adjusted gross income (MAGI) is between:
-- $95,000 and $110,000 for individual filers
-- $190,000 and $220,000 for joint filers |
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| • |
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No contributions can be made if contributor's MAGI exceeds the stated limits. |
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| • |
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Interest, dividends and capital gains grow tax deferred and will be distributed tax free as long as the money is used to pay qualified education expenses. |
529 Plans
| • |
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Earning accumulate tax deferred: qualified withdrawals prior to 2011 are federal-income-tax-free.* |
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| • |
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No income, state residency or age restrictions. |
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| • |
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Potential state tax incentives available for some in-state plans. |
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| • |
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No contributions can be made if contributor's MAGI exceeds the stated limits. |
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| • |
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Contributions up to $60,000 (single) and $120,000 (married couples) allowed in one year without a reduction in the applicable gift / estate tax exclusion amount. No additional gifting for five years. |
* Subject to the sunset provisions of the Economic Growth and Tax Relief Reconciliation Act of 2001.
Education Credits
| Hope Credit |
|
Up to $1,800 per student for first two years of qualified education expenses paid |
|
| Lifetime Learning Credit |
|
Up to 20% of the first $10,000 of qualified expenses paid in 2008 |
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| MAGI Phase-Outs |
|
Married Filing Jointly: $96,000 - 116,000
Others: $48,000 - 58,000 |
Exclusion of U.S. Savings Bond Income
| MAGI Phase-Outs |
|
Married Filing Jointly: $100,650 - 130,650
Others: $67,100 - 82,100 |
Bonds must be titled in parent(s)' name only.
Owner must be age 24 or older at time of issue.
Must be Series EE issued after 1989 or and Series I bonds.
Student Loan Interest Deduction
| Maximum Deduction |
|
$2,500 |
|
| MAGI Phase-Outs |
|
Married Filing Jointly: $105,000 - 135,000
Others: $50,000 - 65,000 |
Kiddie Tax
Children who have not reached the age of 18 by the end of the tax year will be subject to the "kiddie tax" rules, and the following tax rate schedule will apply (assumes no earned income).
| 2006 Unearned Income |
|
Tax Treatment |
|
| Under $900 |
|
No tax |
|
| $900 - $1,800 |
|
Taxed at child's rate |
|
| Over $1,800 |
|
Taxed at the parents' top marginal rate |
TOP |
| Retirement Account Contributions : 2008 |
|
|
Pretax 401(k), 403(b) Or 457 Contributions
| Employee Maximum |
|
Catch-Up contribution If Age 50 or Older |
|
| $15,500 |
|
$5,000 |
Combined limit for Roth 401(k) and pretax traditional 401(k) contributions is $15,500.
Traditional and Roth IRA Contribution
| Maximum |
|
Catch-Up contribution If Age 50 or Older |
|
| $5,000 |
|
$1,000 |
2008 contributions must be made before the tax filing deadline (April 15, 2009), regardless of tax extensions
Traditional IRA Deductibility Limits
| If Neither Individual nor Spouse Is a Participant In Another Plan: |
|
$5,000* Maximum deduction |
|
| If the Individual Is an Active Participant in Another Plan: |
|
Modified adjusted gross income (MAGI) |
|
| Married / Joint |
|
Single |
|
Deduction Is |
|
| Up to $85,000 |
|
Up to $53,000 |
|
$5,000* |
|
| $85,000 - $105,000 |
|
$53,000 - $63,000 |
|
Phased out |
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| $105,000 and over |
|
$63,000 and over |
|
No deduction |
* If a spouse (working or non-working) is not covered by a retirement plan, but his or her spouse is covered, the spouse who is not covered is allowed full deductibility up to $159,000 MAGI, phased out at $169,000 joint MAGI.
Roth IRA Qualifications
| • |
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Contributions are not tax-deductible. |
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| • |
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Contribution are allowed after the age of 70 1/2 if contribution is made from earned income. |
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| • |
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Contribution amount is limited if modified adjusted gross income (MAGI) is between:
-- $101,000 and $116,000 for individual returns
-- $159,000 and $169,000 for joint returns |
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| • |
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Cannot contribute if MAGI exceeds limits. |
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Uniform Lifetime / Minimum Distribution Table
| Age |
|
Life Expectancy |
|
Age |
|
Life Expectancy |
|
| 70 |
|
27.4 |
|
88 |
|
12.7 |
|
| 71 |
|
26.5 |
|
89 |
|
12.0 |
|
| 72 |
|
25.6 |
|
90 |
|
11.4 |
|
| 73 |
|
24.7 |
|
91 |
|
10.8 |
|
| 74 |
|
23.8 |
|
92 |
|
10.2 |
|
| 75 |
|
22.9 |
|
93 |
|
9.6 |
|
| 76 |
|
22.0 |
|
94 |
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