Current Tax Information...

 

Beginning Jan. 1, 2008, the standard mileage rates for the use of a car (including vans, pickups or panel trucks) will be:

  • 50.5 cents per mile for business miles driven;
  • 19 cents per mile driven for medical or moving purposes; and
  • 14 cents per mile driven in service of charitable organizations.

The new rate for business miles compares to a rate of 48.5 cents per mile for 2007. The new rate for medical and moving purposes compares to 20 cents in 2007. The rate for miles driven in service of charitable organizations has remained the same.

 

Important Tax Figures for 2008 Returns

2008 Social Security Changes:

Standard Deduction

Personal Exemption - Per taxpayer and dependent: $3,500

Retirement Plan Limits

Maximum contributions vary by the type of retirement plan:

Gift and Estate Limits

Regular Income Tax Rate Schedule for Tax Year 2008

Single

If taxable income is between:

$1 to $8,025 X 10% minus $0.00 = Tax

$8,026 to $32,550 X 15% minus $401.25 = Tax

$32,551 to $78,850 X 25% minus $3,656.25 = Tax

$78,851 to $164,550 X 28% minus $6,021.75 = Tax

$164,551 to $357,700 X 33% minus $14,249.25 = Tax

$357,701 to ............. X 35% minus $21,403.25 = Tax

Head of Household

If taxable income is between:

$1 to $11,450 X 10% minus $0.00 = Tax

$11,451 to $43,650 X 15% minus $572.50 = Tax

$43,651 to $112,650 X 25% minus $4,937.50 = Tax

$112,651 to $182,400 X 28% minus $8,317.00 = Tax

$182,401 to $357,700 X 33% minus $17,437.00 = Tax

$357,701 to ............. X 35% minus $24,591.00 = Tax

Married Filing Jointly or Qualifying Widow(er)

If taxable income is between:

$1 to $16,050 X 10% minus $0.00 = Tax

$16,051 to $65,100 X 15% minus $802.50 = Tax

$65,101 to $131,450 X 25% minus $7,312.50 = Tax

$131,451 to $200,300 X 28% minus $11,256.00 = Tax

$200,301 to $357,700 X 33% minus $21,271.00 = Tax

$357,701 to ............. X 35% minus $28,425.00 = Tax

Married Filing Separately

If taxable income is between:

$1 to $8,025 X 10% minus $0.00 = Tax

$8,026 to $32,550 X 15% minus $401.25 = Tax

$32,551 to $65,725 X 25% minus $3,656.25 = Tax

$65,726 to $100,150 X 28% minus $5,628.00 = Tax

$100,151 to $178,850 X 33% minus $10,635.50 = Tax

$178,851 to ............. X 35% minus $14,212.50 = Tax

 

 

Important Tax Figures for 2007 Returns

Standard Deduction

Personal Exemption - Per taxpayer and dependent: $3,400

Retirement Plan Limits

Maximum contributions vary by the type of retirement plan:

Gift and Estate Limits

Schedule X — Single

If taxable income is  over-- But not over-- The tax is:
$0 $7,825 10% of the amount over $0
$7,825 $31,850 $782.50 plus 15% of the amount over 7,825
$31,850 $77,100 $4,386.25 plus 25% of the amount over 31,850
$77,100 $160,850 $15,698.75 plus 28% of the amount over 77,100
$160,850 $349,700 $39,148.75 plus 33% of the amount over 160,850
$349,700 no limit $101,469.25 plus 35% of the amount over 349,700

 

Schedule Y-1 — Married Filing Jointly or Qualifying Widow(er)

If taxable income is over-- But not over-- The tax is:
$0 $15,650 10% of the amount over $0
$15,650 $63,700 $1,565.00 plus 15% of the amount over 15,650
$63,700 $128,500 $8,772.50 plus 25% of the amount over 63,700
$128,500 $195,850 $24,972.50 plus 28% of the amount over 128,500
$195,850 $349,700 $43,830.50 plus 33% of the amount over 195,850
$349,700 no limit $94,601.00 plus 35% of the amount over 349,700

 

Schedule Y-2 — Married Filing Separately

 

If taxable income is over-- But not over-- The tax is:
$0 $7,825 10% of the amount over $0
$7,825 $31,850 $782.50 plus 15% of the amount over 7,825
$31,850 $64,250 $4,386.25 plus 25% of the amount over 31,850
$64,250 $97,925 $12,486.25 plus 28% of the amount over 64,250
$97,925 $174,850 $21,915.25 plus 33% of the amount over 97,925
$174,850 no limit $47,300.50 plus 35% of the amount over 174,850

 

Schedule Z — Head of Household

 

If taxable income is over-- But not over-- The tax is:
$0 $11,200 10% of the amount over $0
$11,200 $42,650 $1,120.00 plus 15% of the amount over 11,200
$42,650 $110,100 $5,837.50 plus 25% of the amount over 42,650
$110,100 $178,350 $22,700.00 plus 28% of the amount over 110,100
$178,350 $349,700 $41,810.00 plus 33% of the amount over 178,350
$349,700 no limit $98,355.50 plus 35% of the amount over 349,700

 

2007 Standard Mileage Rates:

Business miles. The standard mileage rate for the cost of operating your car increases to 48.5 cents a mile for all business miles driven.

Charitable services. The standard mileage rate allowed for use of your car when you use your car to provide charitable services to a charitable organization remains at 14 cents a mile.

Medical reasons. The standard mileage rate allowed for use of your car for medical reasons increases to 20 cents a mile.

Moving. The standard mileage rate for determining moving expenses increases to 20 cents a mile.

2007 Social Security Changes:

Rate 7.65% - wage limit is $97,500

Medicare portion is 1.45% on all earnings

Self-employment rate is 15.3%

Pennsylvania has a two-tier minimum wage, and there will be changes to the rates on both tiers. The difference between the tiers is that the rates on one tier apply only to employers with 10 or less employees. The rates on the other tier apply to all other employers. For the tier used by employers of 10 or less full-time employees, there will be the following changes:

----effective 1/1/2007 the minimum wage rate will increase from $5.15 to $5.65 per hour.
----effective 7/1/2007 the minimum wage rate will increase from $5.65 to $6.65 per hour.
----effective 7/1/2008 the minimum wage rate will increase from $6.65 to $7.15 per hour.

On the tier applicable to employers of more than 10 full-time employees, there will be the following changes:
----effective 1/1/2007 the minimum wage rate will increase from $5.15 to $6.25 per hour.
----effective 7/1/2007 the minimum wage rate will increase from $6.25 to $7.15 per hour.

For both minimum wage rate tiers, the maximum tip credit rate will remain unchanged at 40%, and the training/youth minimum wage rate will remain unchanged at 85% of the regular minimum wage rate. The Training/Youth rate applies to workers under age 16.

The basic standard deduction amounts for 2006:

Head of household — $7,550

Married filing jointly & qualifying widow(er)s — $10,300

Married taxpayers filing separately — $5,150

Single — $5,150

2006 and 2007 Exemption Amounts:

The value of each personal and dependency exemption, available to most taxpayers, will be $3,400, up from $3,300 in 2006.

The new 2007 standard deduction will be $10,700 for married couples filing a joint return (up $400), $5,350 for singles and married individuals filing separately (up $200) and $7,850 for heads of household (up $300). Nearly two out of three taxpayers take the standard deduction, rather than itemizing deductions, such as mortgage interest, charitable contributions and state and local taxes.

2007 RETIREMENT/PENSION PLANS

The limit on elective deferrals under 401(k) plans, 403(b) plans and 457 plans will increase from $15,000 to $15,500.

The limit on extra catch-up contributions by participants age 50 or older stays at $5,000 for 2007. The total contribution by such participants in 2007 will therefore be $20,500.

The Section 415 limits increase from $44,000 to $45,000 for 401(k) and other defined contribution plans, and from $175,000 to $180,000 for defined benefit plans.

The limit on the annual compensation that can be taken into account by qualified plans increases from $220,000 to $225,000.

The dollar level for becoming a highly-compensated employee stays at $100,000 of pay in 2007 for determinations in 2008 (the same level as applies for determinations in 2007 based on 2006 pay).

2006 ESTATE AND GIFT TAXES

Unified Credit Shelter Amount $2,000,000 (Top rate of $46%)

Annual Gift Tax Exclusion Amount (Per donee) $12,000

2007 PAYROLL TAXES

Self-employed Combined Rate (OASDI+Medicare) 15.3% (no change for 2007)

Soc. Sec. Rate (OASDI+Medicare) 7.65% (no change for 2007)

OASDI Maximum Base $97,500 for 2007

FUTA Rate 6.2% (FUTA Wage Base $7,000)

Nanny Tax Threshold $1,500—same as 2006

 

2006 Federal Tax Rate Schedules

Schedule X — Single

If taxable income is  over-- But not over-- The tax is:
$0 $7,550 10% of the amount over $0
$7,550 $30,650 $755 plus 15% of the amount over 7,550
$30,650 $74,200 $4,220.00 plus 25% of the amount over 30,650
$74,200 $154,800 $15,107.50 plus 28% of the amount over 74,200
$154,800 $336,550 $37,675.50 plus 33% of the amount over 154,800
$336,550 no limit $97,653.00 plus 35% of the amount over 336,550

 

Schedule Y-1 — Married Filing Jointly or Qualifying Widow(er)

If taxable income is over-- But not over-- The tax is:
$0 $15,100 10% of the amount over $0
$15,100 $61,300 $1,510.00 plus 15% of the amount over 15,100
$61,300 $123,700 $8,440.00 plus 25% of the amount over 61,300
$123,700 $188,450 $24,040.00 plus 28% of the amount over 123,700
$188,450 $336,550 $42,170.00 plus 33% of the amount over 188,450
$336,550 no limit $91,043.00 plus 35% of the amount over 336,550

 

Schedule Y-2 — Married Filing Separately

 

If taxable income is over-- But not over-- The tax is:
$0 $7,550 10% of the amount over $0
$7,550 $30,650 $755.00 plus 15% of the amount over 7,550
$30,650 $61,850 $4,220.00 plus 25% of the amount over 30,650
$61,850 $94,225 $12,020.00 plus 28% of the amount over 61,850
$94,225 $168,275 $21,085.00 plus 33% of the amount over 94,225
$168,275 no limit $45,521.50 plus 35% of the amount over 168,275

 

Schedule Z — Head of Household

 

If taxable income is over-- But not over-- The tax is:
$0 $10,750 10% of the amount over $0
$10,750 $41,050 $1,075.00 plus 15% of the amount over 10,750
$41,050 $106,000 $5,620.00 plus 25% of the amount over 41,050
$106,000 $171,650 $21,857.50 plus 28% of the amount over 106,000
$171,650 $336,550 $40,239.50 plus 33% of the amount over 171,650
$336,550 no limit $94,656.50 plus 35% of the amount over 336,550