 Tax Articles
Tax Credits and Incentives for Production Companies in New Jersey
Taxpayer Victory in Wisconsin on "Custom Software"
Sales/Use Tax
Supreme Court Upholds Municipal Bond Exemption
Tax Incentives for Small Businesses
Economic Stimulus Act of 2008
2008 Tax Pocket Guide
A Makeover for Uncertain Tax Positions
Substantiating Charitable Contributions - The Rules Tighten
Executive Tax Planning for Change of State Residence
White Paper on FIN 48
Phone Tax Refunds Available — How to get yours!
Archives
2007 Tax Pocket Guide
2006 Tax Planning Guide
Tax Legislation Bush Signs $146 Billion Tax Plan, Reiterates Intention to Seek Permanency
New Jersey Legislation Enacted June 2004
The American Jobs Creation Act of 2004
The Working Families Tax Relief Act of 2004
Maximizing Your Retirement Plan
Summary of Current NJ Legislative Changes
Jobs and Growth Tax Relief Reconciliation Act of 2003
New Jersey Business Tax Reform Act
Tax Services for SEC Companies & Subsidiaries
|
2007 Tax Pocket Guide
Depreciation
36-Month Assets (Straight-Line)
Most software
3-Year Assets (200% DB)
Dies, molds, small tools, certain horses
5-Year Assets (200% DB)
Autos, computers, typewriters, copiers, many types
of equipment, private aircraft
7-Year Assets (200% DB)
Most manufacturing equipment, office furniture,
printing equipment, oil and gas production equipment
7-Year Assets (150% DB)
Farm equipment
27.5-Year Assets (Straight-Line)
Rental houses, apartments, low-income housing
39-Year Assets (Straight-Line)
Nonresidential buildings
Personal Property Depreciation
Percent of Original Depreciable Basis under 200% DB
Method
(Not applicable for mid-quarter convention)
| Recovery Year |
3-Year Class |
5-Year Class |
7-Year Class |
| 1 |
33.33 |
20.00 |
14.29 |
| 2 |
44.45 |
32.00 |
24.49 |
| 3 |
14.81 |
19.20 |
17.49 |
| 4 |
7.41 |
11.52 |
12.49 |
| 5 |
|
11.52 |
8.93 |
| 6 |
|
5.76 |
8.92 |
| 7 |
|
|
8.93 |
| 8 |
|
|
4.46 |
Section 179 Expense
| |
2007 |
2006 |
| Maximum expense election |
$112,000 |
$108,000 |
| Phaseout threshold |
$450,000 |
$430,000 |
Regular Tax
| If Taxable Income Is Between: |
Your Tax Is: |
Of Amount Over: |
| $ 0 - $ 50,000 |
.................... 15% |
$ 0 |
| $ 50,001 - $ 75,000 |
$ 7,500 + 25% |
$ 50,000 |
| $ 75,001 - $ 100,000 |
$ 13,750 + 34% |
$ 75,000 |
| $ 100,001 - $ 335,000 |
$ 22,250 + 39% |
$ 100,000 |
| $ 335,001 - $10,000,000 |
$ 113,900 + 34% |
$ 335,000 |
| $10,000,001 - $15,000,000 |
$ 3,400,000 + 35% |
$10,000,000 |
| $15,000,001 - $18,333,333 $ |
$ 5,150,000 + 38% |
$15,000,000 |
| $18,333,334 and above |
a flat 35% |
|
Personal Service Corporations — 35% flat tax rate.
Capital Gains Tax Rate — Same as regular rate.
Estate Taxes
| |
2007 |
2006 |
| Estate tax exemption |
$ 2,000,000 |
$ 2,000,000 |
| Applicable credit amount |
$ 780,800 |
$ 780,800 |
| Top estate tax rate |
45% |
46% |
Gift Taxes
| |
2007 |
2006 |
| Lifetime gift tax exemption |
$ 1,000,000 |
$ 1,000,000 |
| Annual gift tax exclusion |
|
|
| Gifts per person |
$ 12,000 |
$ 12,000 |
| Joint gifts by spouse |
$ 24,000 |
$ 24,000 |
| Top gift tax rate |
45% |
46% |
| If you are: |
You may deduct this much of
your annual premiums |
| |
2007 |
2006 |
| Over 70 |
$ 3,680 |
$ 3,530 |
| 61 to 70 |
$ 2,950 |
$ 2,830 |
| 51 to 60 |
$ 1,100 |
$ 1,060 |
| 41 to 50 |
$ 550 |
$ 530 |
| 40 and under |
$ 290 |
$ 280 |
| Holding Period |
Top Capital Gains Rates |
| 12 months or less |
35% |
| More than 12 months |
15% |
| Depreciation recapture on real estate |
25% |
| Collectibles and certain small business stock |
28% |
| Contribution limit |
$ 2,000 per beneficiary |
| AGI phaseouts*: |
|
| Joint filers |
$190,000 - $220,000 |
| Individual filers |
$ 95,000 - $110,000 |
* Phaseout applies to the contributor, not the beneficiary.
Note: Coverdell ESAs (Education Savings Accounts) were formerly known as Education
IRAs. Contributions for ESAs must be made before the filing date of the tax return, not
including extensions.
| Use |
2007 |
2006 |
| Business |
48.5¢ per mile |
44.5¢ per mile |
| Charitable |
14¢ per mile |
14¢ per mile* |
| Medical |
20¢ per mile |
18¢ per mile |
| Moving |
20¢ per mile |
18¢ per mile |
* Special rates apply for Katrina-related charitable services: 32¢ for deductions
and 44.5¢ for reimbursements for Jan. 1—Dec.
31, 2006.
This publication is distributed with the understanding that the publisher and
distributor are not rendering legal, accounting, or other professional advice
and assume no liability
whatsoever in connection with its use. © 2007
MHM Publications Inc.
Regular Tax — Married, Filing Jointly or Surviving Spouse
| If Taxable Income Is Between: |
Your Tax Is: |
Of Amount Over: |
| $ 0 - $ 15,650 |
................ 10% |
$ 0 |
| $ 15,650 - $ 63,700 |
$ 1,565 + 15% |
$ 15,650 |
| $ 63,700 - $ 128,500 |
$ 8,773 + 25% |
$ 63,700 |
| $ 128,500 - $ 195,850 |
$ 24,973 + 28% |
$ 128,500 |
| $ 195,850 - $ 349,700 |
$ 43,831 + 33% |
$ 195,850 |
| $ 349,700 and above |
$ 94,601 + 35% |
$ 349,700 |
Married, Filing Separately
| If Taxable Income Is Between: |
Your Tax Is: |
Of Amount Over: |
| $ 0 - $ 7,825 |
................ 10% |
$ 0 |
| $ 7,825 - $ 31,850 |
$ 783 + 15% |
$ 7,825 |
| $ 31,850 - $ 64,250 |
$ 4,386 + 25% |
$ 31,850 |
| $ 64,250 - $ 97,925 |
$ 12,486 + 28% |
$ 64,250 |
| $ 97,925 - $ 174,850 |
$ 21,915 + 33% |
$ 97,925 |
| $ 174,850 and above |
$ 47,301 + 35% |
$ 174,850 |
Single
| If Taxable Income Is Between: |
Your Tax Is: |
Of Amount Over: |
| $ 0 - $ 7,825 |
................ 10% |
$ 0 |
| $ 7,825 - $ 31,850 |
$ 783 + 15% |
$ 7,825 |
| $ 31,850 - $ 77,100 |
$ 4,386 + 25% |
$ 31,850 |
| $ 77,100 - $ 160,850 |
$ 15,699 + 28% |
$ 77,100 |
| $ 160,850 - $ 349,700 |
$ 39,149 + 33% |
$ 160,850 |
| $ 349,700 and above |
$101,469 + 35% |
$ 349,700 |
Head of Household
| If Taxable Income Is Between: |
Your Tax Is: |
Of Amount Over: |
| $ 0 - $ 11,200 |
................ 10% |
$ 0 |
| $ 11,200 - $ 42,650 |
$ 1,120 + 15% |
$ 11,200 |
| $ 42,650 - $ 110,100 |
$ 5,838 + 25% |
$ 42,650 |
| $ 110,100 - $ 178,350 |
$ 22,700 + 28% |
$ 110,100 |
| $ 178,350 - $ 349,700 |
$ 41,810 + 33% |
$ 178,350 |
| $ 349,700 and above |
$ 98,356 + 35% |
$ 349,700 |
The phaseout of personal exemptions for taxpayers above certain income levels is not
reflected in these schedules.
Qualified Dividend Income 15% (5% for lower brackets)
| |
2007 |
2006 |
| Married filing jointly |
$10,700 |
$10,300 |
| Single |
$ 5,350 |
$ 5,150 |
| Head of household |
$ 7,850 |
$ 7,550 |
| Married filing separately |
$ 5,350 |
$ 5,150 |
| Additional — blind or elderly |
|
|
| Single |
$ 1,300 |
$ 1,250 |
| Married |
$ 1,050 |
$ 1,000 |
* Deduct the greater of standard or itemized deductions.
Regular Tax — Married, Filing Jointly or Surviving Spouse
| If Taxable Income Is Between: |
Your Tax Is: |
Of Amount Over: |
| $ 0 - $ 15,100 |
................ 10% |
$ 0 |
| $ 15,100 - $ 61,300 |
$ 1,510 + 15% |
$ 15,100 |
| $ 61,300 - $ 123,700 |
$ 8,440 + 25% |
$ 61,300 |
| $ 123,700 - $ 188,450 |
$ 24,040 + 28% |
$ 123,700 |
| $ 188,450 - $ 336,550 |
$ 42,170 + 33% |
$ 188,450 |
| $ 336,550 and above |
$ 91,043 + 35% |
$ 336,550 |
Married, Filing Separately
| If Taxable Income Is Between: |
Your Tax Is: |
Of Amount Over: |
| $ 0 - $ 7,550 |
................ 10% |
$ 0 |
| $ 7,550 - $ 30,650 |
$ 755 + 15% |
$ 7,550 |
| $ 30,650 - $ 61,850 |
$ 4,220 + 25% |
$ 30,650 |
| $ 61,850 - $ 94,225 |
$ 12,020 + 28% |
$ 61,850 |
| $ 94,225 - $ 168,275 |
$ 21,085 + 33% |
$ 94,225 |
| $ 168,275 and above |
$ 45,522 + 35% |
$ 168,275 |
Single
| If Taxable Income Is Between: |
Your Tax Is: |
Of Amount Over: |
| $ 0 - $ 7,550 |
................ 10% |
$ 0 |
| $ 7,550 - $ 30,650 |
$ 755 + 15% |
$ 7,550 |
| $ 30,650 - $ 74,200 |
$ 4,220 + 25% |
$ 30,650 |
| $ 74,200 - $ 154,800 |
$ 15,108 + 28% |
$ 74,200 |
| $ 154,800 - $ 336,550 |
$ 37,676 + 33% |
$ 154,800 |
| $ 336,550 and above |
$ 97,653 + 35% |
$ 336,550 |
Head of Household
| If Taxable Income Is Between: |
Your Tax Is: |
Of Amount Over: |
| $ 0 - $ 10,750 |
................ 10% |
$ 0 |
| $ 10,750 - $ 41,050 |
$ 1,075 + 15% |
$ 10,750 |
| $ 41,050 - $ 106,000 |
$ 5,620 + 25% |
$ 41,050 |
| $ 106,000 - $ 171,650 |
$ 21,858 + 28% |
$ 106,000 |
| $ 171,650 - $ 336,550 |
$ 40,240 + 33% |
$ 171,650 |
| $ 336,550 and above |
$ 94,657 + 35% |
$ 336,550 |
The phaseout of personal exemptions for taxpayers above certain income levels is not
reflected in these schedules.
Qualified Dividend Income 15% (5% for lower brackets)
| |
2007 |
2006 |
| Deduction for each taxpayer,
spouse, and dependent |
$ 3,400* |
$ 3,300* |
Personal exemptions phase out
after the following threshold
amounts: |
|
|
| Joint returns or surviving spouse |
$234,600 |
$225,750 |
| Head of household |
$195,500 |
$188,150 |
| Single |
$156,400 |
$150,500 |
| Married filing separately |
$117,300 |
$112,875 |
* Reduced by 2% for each $2,500 increment of AGI in excess of threshold phaseout
amounts. ($1,250 for married persons filing separately.)
Indexed Contribution & Benefit Limits
for Qualified Plans
| Type of Plan |
2007 |
2006 |
| Individual Retirement Accounts (IRAs)* |
$ 4,000 |
$ 4,000 |
| Section 401(k) plans or SAR-SEPs* |
$ 15,500 |
$ 15,000 |
| Section 403(b) plans |
$ 15,500 |
$ 15,000 |
| Section 408(p)(2)(E) SIMPLE contributions* |
$ 10,500 |
$ 10,000 |
| Section 457(b)(2) limit |
$ 15,500 |
$ 15,000 |
| Section 415 limit for: |
|
|
| Defined contribution plans |
$ 45,000 |
$ 44,000 |
| Defined benefit plans |
$180,000 |
$175,000 |
| Highly compensated employees Section 414(q) |
$100,000 |
$ 100,000 |
| FICA taxable wage base |
|
|
Social security (tax rate 6.20% for employees;
12.40% for self-employed) |
$ 97,500 |
$ 94,200 |
Medicare (tax rate 1.45% for employees;
2.90% for self-employed) |
No limit |
No limit |
| * Age 50 additional contributions |
|
|
| 401(k) type plans |
$ 5,000 |
$ 5,000 |
| SIMPLEs |
$ 2,500 |
$ 2,500 |
| IRAs |
$ 1,000 |
$ 1,000 |
Roth IRAs — 2007 & 2006
Nondeductible contributions
Qualified tax-free distributions
| AGI limit for maximum contributions: |
2007 |
2006 |
| Joint filers |
$156,000 |
$150,000 |
| Individual filers |
$ 99,000 |
$95,000 |
Maximum Annual Earned Income Limit
| |
2007 |
2006 |
| Under full retirement age |
$ 12,960 |
$ 12,480 |
| Full retirement age |
No Limit |
No Limit |
* For people reaching full retirement age in 2007, the limit is $34,440 for months
prior to attainment. Beginning the month in which they turn full retirement age,
there is no limit.
| Contribution Limits |
2007 |
2006 |
| Individual, self-only |
$2,850 |
$2,700 |
| Family Coverage |
$5,650 |
$5,450 |
| Catch-up for those age 55 and older |
$ 800 |
$ 700 |
For 2007, the minimum deductible for a high-deductible health plan (HDHP)
is $1,100 for self-only coverage and $2,200 for family coverage. The maximum
out-of-pocket limit is $5,500 for self-only coverage and $11,000 for family
plans.
| AMT Exemptions |
2007 |
2006 |
| Single filers |
$33,750 |
$42,500 |
| Joint filers |
$45,000 |
$62,550 |
| Married, filing separately |
$22,500 |
$31,275 |
| Head of household |
$33,750 |
$42,500 |
|
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