Tax Facts at a Glance
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This information on this
page is
provided to assist businesses and individuals. It is
accurate to the best of our knowledge.
|
 |
|
However, nothing on this
page should be used to answer any particular financial question or
be considered professional advice.
|
|
Please
contact us for specific advice. |
|
|
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20+ Common Questions Answered!
Read our Ask a CPA feature for general information on your taxes and
finances.
Ask a CPA!! |
Deductions
For the 2005 Tax Year
(see
below for 2006) |
|
|
Federal |
California |
|
Standard Deductions |
|
Single |
$5,000 |
$3,254 |
|
Married Filing Jointly or Surviving
Spouse |
$10,000 |
$6,508 |
|
Married Filing Separately |
$5,000 |
$3,254 |
|
Head of Household |
$7,300 |
$6,508 |
|
Additional for 65 or Older or Blind -
Married |
$1,000 |
|
|
Additional for 65 and Older Blind -
Unmarried |
$1,250 |
|
|
Taxpayer claimed as a dependent
|
$800 |
|
|
Personal/Dependent Exemption
Social Security Number is required - $50 penalty |
$3,200
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Deductions
For the 2006 Tax Year
(see
above for 2005) |
| |
Federal |
California |
| Standard Deductions |
|
Single |
$5,150 |
Not yet available |
| Married Filing Jointly or
Surviving Spouse |
$10,300 |
| Married Filing Separately |
$5,150 |
| Head of Household |
$7,550 |
| Additional for 65 or Older or
Blind - Married |
$1,000 |
| Additional for 65 and Older Blind
- Unmarried |
$1,250 |
| Taxpayer claimed as a dependent
|
$850 on $300 + of
earned income |
|
Personal/Dependent
Exemption
Social Security Number is required - $50 penalty |
$3,300 |
|
 |
|
|
Automobile Standard
Mileage Allowances
|
|
|
2005 |
2006 |
|
Business |
Jan - Aug
.405/mile
* * *
Sep - Dec
.48.5 |
.445/mile |
|
Charity |
.14/mile |
.14/mile |
|
Medical/Moving |
Jan - Aug
.15/mile
* * *
Sep - Dec
.22/mile |
.18/mile |
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California Credits
For the 2005 Tax Year
|
|
|
|
California |
|
California Exemption Credits |
|
Single/Separate or Head of Household |
|
$87 |
|
Joint/Surviving Spouse |
|
$174 |
|
Dependent |
|
$272 |
|
Blind or over 65 |
|
$87 |
|
Senior Head of Household Credit |
2% of California taxable income, maximum California AGI
of $56,262 maximum credit of $1,060 |
|
Joint Custody Head of Household
Credit -
and -
Dependent Parent Credit |
Each is 30% of net tax, with maximum credit of $346 |
|
Child and Dependent Care Credit
California
allows a percentage of federal credit based on the California
AGI .
California allows these credits: |
|
California
AGI from $0 to $40,000 |
|
50% |
|
California
AGI from $40,001 to $70,000 |
|
43 |
|
California
AGI from $70,001 to $100,000 |
|
34 |
|
California
AGI over $100,001 |
|
0% |
|
Credentialed Teacher's Retention Credit |
|
|
Years |
Credit |
|
Credit suspended for taxable years 2004 and
2005 |
|
0 |
|
Renter's Credit |
|
Joint/Head-of-Household/Surviving Spouse
if AGI is below $61,588 |
|
$120 |
|
Single/Married Filing Separate if AGI
is below $30,794 |
|
$60 |
|
 |
|
|
Tax Data 2005
for Tax Year 2005 unless otherwise indicated
|
| |
Federal |
California |
| Section 179
Deduction |
105,000 |
25,000 |
|
Beginning of
Personal Exemption Phase-out
Range based on Federal
AGI
|
| Single |
$145,950 |
California doesn't have Personal Exemptions which
are handled in the same way as the federal |
| Married Filing
Jointly |
$218,950 |
| Married Filing
Separately |
$109,475 |
| Head of Household |
$182,450 |
| Surviving Spouse |
$218,950 |
|
Beginning of
Itemized Deduction Phase-out
Range based on
AGI
|
| Single |
$145,950 |
$143,839 |
| Married Filing
Jointly/Surviving Spouse |
$145,950 |
$287,682 |
| Married Filing
Separately |
$72,975 |
$143,839 |
| Head of Household |
$145,950 |
$215,762 |
| Rate Reduced over
federal
AGI
limits |
3% |
6% |
|
Schedule A
Threshold/Limits |
| Medical (of
AGI ) based on federal threshold |
7.5% |
Follows federal |
| Miscellaneous (of
AGI ) based on federal threshold |
2% |
|
Alternative Minimum
Tax (AMT) Rate |
|
AMTI Less Exemption up to $175,000 |
26% |
7% |
AMTI Less Exemption over $175,000
($87,500) if Married Filing Separately |
28% |
7% |
|
AMT Exemption
Amounts |
| Married Filing
Jointly/Surviving Spouse |
$58,000 |
$70,531 |
| Single, Head of
Household |
$40,250 |
$52,898 |
| Married Filing
Separately, Estates and Trusts |
$29,000 |
$35,263 |
|
AMT Exemption
Phase-out Amounts |
| Married Filing
Jointly/Surviving Spouse |
$150,000 |
$264,488 |
| Single and Head of
Household |
$112,500 |
$198,366 |
| Married Filing
Separately, Estates, and Trusts |
$112,500 |
$132,242 |
|
Self-Employed Health
Insurance
Adjustment for
AGI : |
| Percentage of total
qualifying payments for health insurance |
100% |
Follows federal |
|
Maximum Rate
SEP
-IRA
and Keogh Profit Sharing |
20% |
|
Beginning/Ending of
U.S. Savings Bond Interest Exclusion
Based on Modified
AGI
|
| Joint Return |
$94,850/$121,850 |
Federal rules only |
| Unmarried |
$51,200/$76,200 |
| Married Filing
Separately |
No
Exclusion |
|
California SDI
(Deductible as a tax for federal purposes. Amounts
paid to a voluntary program in lieu of the state programs are
not deductible, but may be creditable on Form 540 with
multiple employees.) |
| |
2005 |
2006 |
| Wages – Total annual
limit |
$79,418 |
$79,418 |
| Rate |
1.08% |
0.8% |
| Tax |
$857.71 |
$635.34 |
|
|
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|
|
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|
Federal Tax Rate Schedule
2005
|
|
Taxable Income is Over |
But Not over |
Pay |
+ % |
Of the Amount Over |
|
Single Individuals |
|
$0 |
$7,300 |
$0 |
10% |
$0 |
|
$7,300 |
$29,700 |
$730 |
15% |
$7,300 |
|
$29,700 |
$71,950 |
$4,090 |
25% |
$29,700 |
|
$71,950 |
$150,150 |
$14,652.50 |
28% |
$71,950 |
|
$150,150 |
$326,450 |
$36,548.50 |
33% |
$150,150 |
|
$326,450 |
and more |
$94,727.50 |
35% |
$326,450 |
|
Head of Household |
|
$0 |
$10,450 |
$0 |
10% |
$0 |
|
$10,450 |
$39,800 |
$1,045 |
15% |
$10,450 |
|
$39,800 |
$102,800 |
$5,447.50 |
25% |
$39,800 |
|
$102,800 |
$166,450 |
$21,197.50 |
28% |
$102,800
|
|
$166,450 |
$326,450 |
$39,019.50 |
33% |
$166,450 |
|
$326,450 |
and more |
$91,819.50 |
35% |
$326,450 |
|
Married Individuals Filing Jointly and Qualifying widow(er) |
|
$0 |
$14,600 |
$0 |
10% |
$0 |
|
$14,600 |
$59,400 |
$1,460 |
15% |
$14,600 |
|
$59,400 |
$119,950 |
$8,180 |
25% |
$59,400 |
|
$119,950 |
$182,800 |
$23,317.50 |
28% |
$119,950 |
|
$182,800 |
$326,450 |
$40,915.50 |
33% |
$182,800 |
|
$326,450 |
and more |
$88,320 |
35% |
$326,450 |
|
Married Individuals Filing Separately |
|
$0 |
$7,300 |
$0 |
10% |
$0 |
|
$7,300 |
$29,700 |
$730 |
15% |
$7,300 |
|
$29,700 |
$59,975 |
$4,090 |
25% |
$29,700 |
|
$59,975 |
$91,400 |
$11,658.75 |
28% |
$59,975 |
|
$91,400 |
$163,225 |
$20,457.75 |
33% |
$91,400 |
|
$163,225 |
and more |
$44,160 |
35% |
$163,225 |
|
Estates and Non-Grantor Trusts |
|
$0 |
$2,000 |
$0 |
15% |
$0 |
|
$2,000 |
$4,700 |
$300 |
25% |
$2,000 |
|
$4,700 |
$7,150 |
$975 |
28% |
$4,700 |
|
$7,150 |
$9,750 |
$1,661 |
33% |
$7,150 |
|
$9,750 |
and more |
$2,519 |
35% |
$9,750 |
|
|
|
|
|
|
|
California Tax Rate Schedule
2005
|
|
Taxable Income is Over |
But Not over |
Pay |
+ % |
Of the Amount Over |
|
Single Individuals, Married Filing Separately, Fiduciary Tax
Returns |
|
$0 |
$6,319 |
$0 |
1% |
$0 |
|
$6,319 |
$14,979 |
$63.19 |
2% |
$6,319 |
|
$14,979 |
$23,641 |
$236.39 |
4% |
$14,979 |
|
$23,641 |
$32,819 |
$582.87 |
6% |
$23,641 |
|
$32,819 |
$41,476 |
$1,133.55 |
8% |
$32,819 |
|
$41,476 |
and more |
$1,826.11 |
9.3% |
$41,476 |
|
Married Filing Jointly, Qualifying Widow(er) |
|
$0 |
$12,638 |
$0 |
1% |
$0 |
|
$12,638 |
$29,958 |
$126.38 |
2% |
$12,638 |
|
$29,958 |
$47,282 |
$472.78 |
4% |
$29,958 |
|
$47,282 |
$65,638 |
$1,165.74 |
6% |
$47,282 |
|
$65,638 |
$82,952 |
$2,267.10 |
8% |
$65,638 |
|
$82,952 |
and more |
$3,652.22 |
9.3% |
$82,952 |
|
Unmarried Head of Household |
|
$0 |
$12,644 |
$0 |
1% |
$0 |
|
$12,644 |
$29,959 |
$126.44 |
2% |
$12,644 |
|
$29,959 |
$38,619 |
$472.74 |
4% |
$29,959 |
|
$38,619 |
$47,796 |
$819.14 |
6% |
$38,619 |
|
$47,796 |
$56,456 |
$1,369.76 |
8% |
$47,796 |
|
$56,456 |
and more |
$2,062.56 |
9.3% |
$56,456 |
|
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Luxury
Auto Depreciation Limit
|
|
See also Post-9/11 Depreciation
information. |
|
Year |
1st Year |
2nd Year |
3rd Year |
4th Year |
| 2002 |
$3,060 |
$4,900 |
$2,950 |
$1,775 |
| 2003 |
$3,060 |
$4,900 |
$2,950 |
$1,775 |
| 2004 |
$2,960 |
$4,800 |
$2,850 |
$1,675 |
| 2005 |
$2,960 |
$4,700 |
$2,850 |
$1,675 |
|
|
|
|
|
FICA
and Self Employment Tax
2005 and 2004
|
|
|
2005 |
2004 |
|
Maximum FICA Tax Rate |
|
Wage Base (Income subject to Social
Security Tax) |
$90,000 |
$87,900 |
|
FICA Tax Rate |
6.2% |
6.2% |
|
SE Tax Rate |
12.4% |
12.4% |
|
Maximum Medicare |
|
HI Wage Base |
Unlimited |
Unlimited |
|
Medicare
HI Rate |
1.45% |
1.45% |
|
Medicare
HI Self-Employment Rate |
2.9% |
2.9% |
|
Maximum Total
FICA/Medicare or SE Tax |
Unlimited |
Unlimited |
|
Earned Income Ceilings for Social
Security Benefits |
|
Under age 65 (or full retirement age) |
$12,000 |
$11,640 |
|
65-70 (or full retirement age) |
Unlimited |
Unlimited |
|
Age 70 and older |
Unlimited |
Unlimited |
|
Medicare Part B Premium |
$78.20/month |
$66.60/month |
|
|
|
|
|
|
|
|
2005 |
2004 |
|
Maximum 401(k)/403(b) Deferral |
$14,000 |
$13,000 |
|
Maximum Defined Contribution Plan
Contribution |
$42,000 |
$41,000 |
|
Maximum Annual Benefit for Defined
Benefit Plans |
$170,000 |
$165,000 |
|
Annual Compensation Limit for Computing
Plan Benefits |
$210,000 |
$205,000 |
|
Annual Compensation Limit for the
Definition of Highly Compensated Employee, Section 414 (q)
(1) |
$90,000 |
$90,000 |
|
Compensation Minimum for SEP coverage |
$450 |
$450 |
|
Maximum Contribution for
SIMPLES |
$10,000 |
$9,000 |
|
Catch-up Contribution (taxpayers 50 and
older)
Applies to deferral plans only |
$4,000 |
$3,000 |
|
Key Employee for Top Heavy Purposes
A "Key Employee" is one of these three: |
|
·
Officers earning over
|
$135,000 |
$130,000 |
|
·
A 5% Owner of Employer earning any
amount
|
|
·
A 1% Owner of Employer earning over
|
$150,000 |
$150,000 |
|
|
|
|
Traditional and Roth
IRA's
2005 and 2004
|
|
|
2005 |
2004 |
|
Contribution Limit |
$4,000 |
$3,000 |
|
Catch-up Contribution (50 and older) |
$1,000 |
$500 |
|
IRA Deduction Phase-out for Special
Contributions |
|
Single |
$50,000 - $60,000 |
$45,000 - $55,000 |
|
Married Filing Jointly |
$70,000 - $80,000 |
$65,000 - $75,000 |
|
IRA Deduction Phase-out for Spousal
Contributions |
|
Married Filing Separately |
$0, - $10,000 |
|
Married Filing Jointly |
$150,000 - $160,000 |
|
Roth IRA Contribution |
|
Single |
$95,000 - $110,000 |
|
Married Filing Jointly |
$150,000 - $160,000 |
|
Married Filing Separately |
$0 - $10,000 |
|
Roth IRA Conversion Phase-out |
|
Single |
$100,000 |
|
Married Filing Jointly |
$100,000 |
|
Married Filing Separately |
Ineligible |
|
|
|
|
Estate
and Gift Tax
Phase-out and Repeal of Estate and
Generation-Skipping Transfer Tax. |
|
Calendar Year |
Estate/GST tax
Death time transfer Exemption |
Highest estate and gift
tax rates |
| 2002 |
$1million/$1.1
million |
50% |
| 2003 |
$1million/$1.1
million |
49% |
| 2004 |
$1.5 million |
48% |
| 2005 |
$1.5 million |
47% |
| 2006 |
$2 million |
46% |
| 2007-08 |
$2 million |
45% |
| 2009 |
$3.5 million |
45% |
| 2010 |
Not applicable
(taxes repealed) |
Top individual
rate (gift tax only) |
|
Gift tax: Annual Gift
Limitation of $11,000 for 2002 and later years. Lifetime
Exemption of $1 million after December 31, 2001. |
|
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Education-Related Tax
Benefits
Deduction
for Qualified Higher Education Costs |
| Calendar Year |
Single
AGI
|
MFJ
AGI |
Deduction |
| 2005 |
$80,000* |
$160,000* |
$4,000 |
| *
Taxpayers with AGI above these thresholds are not entitled to
a deduction. |
|
Coverdell Education Savings
Accounts |
|
Annual Contribution Limit |
$2,000 |
|
Income Eligibility
|
|
Single |
$95,000 - $110,000 |
|
Married Filing Jointly |
$190,000
As a couple's income increases from $190,000 to $220,000,
their contribution limit phases out |
|
Qualified Tuition Programs
Deduct $3,000 in higher education
expenses .
Beginning income of Phase-Out range: |
|
Single |
$50,000 |
|
Married Filing Jointly |
$100,000 |
|
Student Loan Deductions
Deduct interest for the life of the
loan.
Beginning incoming Phase-Out range: |
|
Single |
$50,000 |
|
Married Filing Jointly |
$100,000 |
|
|
|
|
|
This information on this
page is
provided to assist businesses and individuals. It is
accurate to the best of our knowledge.
|
|
However, nothing on this
page should be used to answer any particular financial question or
be considered professional advice.
|
|
Please
contact us for specific advice.
|
|
