Fast Tax Facts 2005: as of Oct. 19, 2005.Welcome to our annual at-a-glance compilation Compiling a program. See compiler. of federal and state tax information. User-friendly user-friendly - Programmer-hostile. Generally used by hackers in a critical tone, to describe systems that hold the user's hand so obsessively that they make it painful for the more experienced and knowledgeable to get any work done. tax rate schedules, facts, figures and assorted data make this time-saving time-saving adj → que ahorra tiempo time-saving adj → qui fait gagner du temps time-saving time adj → section a handy companion. Keep it within arm's reach reach of the arm; the distance the arm can reach. See also: Arm as you enter the upcoming busy season. special thanks to: the CalCPA Committee on Taxation, especially Chair John DiCarlo, CPA (Computer Press Association, Landing, NJ) An earlier membership organization founded in 1983 that promoted excellence in computer journalism. Its annual awards honored outstanding examples in print, broadcast and electronic media. The CPA disbanded in 2000. ; Jeremy Jeremy (jĕr`ĭmē), English form of Jeremiah. The Epistle of Jeremy is a title given to the sixth chapter of Baruch. Needelman; Lisa Edeling, CPA; and the FTB FTB Franchise Tax Board (California; they collect income and sales tax) FTB Family Tax Benefit (Australian welfare assistance) FTB First Time Buyer (housing) for compiling com·pile tr.v. com·piled, com·pil·ing, com·piles 1. To gather into a single book. 2. To put together or compose from materials gathered from several sources: this information. want it to go? Log on to www.calcpa.org/fasttaxfacts and download To receive a file transmitted over a network. In any communications session, "download" means receive, and "upload" means send. The download/upload often implies a big/little scenario, in which data is being downloaded from the "big" server into the "little" user's computer. a PDF (Portable Document Format) The de facto standard for document publishing from Adobe. On the Web, there are countless brochures, data sheets, white papers and technical manuals in the PDF format. . discuss tax topics To join CalCPA's TaxTalk Listserve, e-mail taxtalk-subscribe@yahoogroups.com. tax news Access tax news archives archives Repository for an organized body of records. Archives are produced or received by a public, semipublic, institutional, or business entity in the transaction of its affairs and are preserved by it or its successors. at www.calcpa.org/californiacpa.
2005 TAX DATA SCHEDULE
2005 2005
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 and Older or
Blind--Married 1,000
Additional for 65 and Older
Blind--Unmarried 1,250
(per individual and for each situation: age
or blind)
Taxpayer Claimed as a Dependent 800 800
Personal/Dependent Exemption 3,200
(SSN required: $50 penalty)
California Exemption Credits
Single/Separate or Head of Household $87
Teacher's Retention Credit
This California tax credit has been suspended for taxable years 2004
and 2005.
California Renter's Credit
Joint/Head-of-Household/Surviving Spouse
if AGI is below $50,000 $120
Single/Married Filing Separate if AGI
is below $25,000 60
Sec. 179 Deduction $105,000 $25,000
Beginning of Personal Exemption Phaseout
Range--Based on Federal AGI
Single $145,950 143,839
Married Filing Jointly/Surviving Spouse 218,950 287,682
Married Filing Separately 109,475 143,839
Head of Household 182,450 215,762
Beginning of Itemized Deduction Phaseout Range--Based on Federal 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% 7.5%
Miscellaneous (of AGI)
based on federal threshold 2% 2%
Alternative Minimum Tax (AMT) Rate
AMTI Less Exemption up to $175,000 26%
AMTI Less Exemption over $175,000
($87,500 if Married Filing Separately) 28%
AMTI Less Exemption 7%
AMT Exemption Amounts
Married Filing Jointly/Surviving Spouse $58,000 $70,531
Single, Head of Household 40,250 52,898
Married Filing Separately 29,000 35,263
Estates or Trusts 22,500 35,263
AMT Exemption Phaseout Amounts
Married Filing Jointly/Surviving Spouse $150,000 $264,488
Single and Head of Household 112,500 198,366
Married Filing Separately and
Estates and Trusts 75,000 132,243
Self-Employed Health Insurance
Adjustment for AGI:
Percentage of total qualifying payments
for health insurance 100% 100%
Auto Standard Mileage Allowances
Business (January-August) .405 .405
Business (September-December) .485 .485
Charity Work .14 .14
Medical/Moving (January-August) .15 .15
Medical/Moving (September-December) .22 .22
Maximum Rate SEP-IRA and
Keogh Profit Sharing 25% 25%
Beginning/Ending of U.S. Savings
Bond Interest Exclusion--Based on modified AGI
Joint Return $91,850/121,850
All Other 61,200/76,200
California SDI
(deductible as a tax for federal purposes)
*
Wages--Total annual limit $79,418
Rate 1.08%
Tax 857.71
* Amounts paid to a voluntary program in lieu of the state programs are
not deductible, but may be creditable on Form 540 with multiple
employers.
2005 TAX DATA SCHEDULE
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
$59,730 and 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
Percentage of federal credit California
AGI limits are From-To
0-$40,000 50%
$40,001-$70,000 43%
$70,001-$100,000 34%
$100,001 or more 0%
2005 FEDERAL TAX RATE SCHEDULE
Taxable But Of The
Income Not Amount
Is Over Over Pay +% Over
Single Individuals
$0 $7,300 $0 10% $0
7,300 29,700 730.00 15% 7,300
29,700 71,950 4,090.00 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 1,045.00 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 1,406.00 15% 14,600
59,400 119,950 8,180.00 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 88,320.00 35% 326,450
Married Individuals Filing Separately
$0 $7,300 $0 10% $0
7,300 29,700 730.00 15% 7,300
29,700 59,975 4,090.00 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 44,160.00 35% 163,225
Estates and Nongrantor Trusts
$0 $2,000 $0 15% $0
2,000 4,700 300.00 25% 2,000
4,700 7,150 975.00 28% 4,700
7,150 9,750 1,661.00 33% 7,150
9,750 and more 2,519.00 35% 9,750
2005 STATE TAX RATE SCHEDULE
Single Individuals, Married Filing Separately,
Fiduciary Tax Returns
$0 $6,319 $0 1.00% $0
6,319 14,979 63.19 2.00% 6,319
14,979 23,641 236.39 4.00% 14,979
23,641 32,819 582.87 6.00% 23,641
32,819 41,476 1,133.55 8.00% 32,819
41,476 and more 1,826.11 9.30% 41,476
An additional 1% surcharge applies to taxable
income in excess of $1 million.
Married Filing Jointly, Qualifying Widow(er)
$0 $12,638 $0 1.00% $0
12,638 29,958 126.38 2.00% 12,638
29,958 47,282 472.78 4.00% 29,958
47,282 65,638 1,165.74 6.00% 47,282
65,638 82,952 2,267.10 8.00% 65,638
82,952 and more 3,652.22 9.30% 82,952
An additional 1% surcharge applies to taxable
income in excess of $1 million.
Unmarried Head of Household
$0 $12,644 $0 1.00% $0
12,644 29,959 126.44 2.00% 12,644
29,959 38,619 472.74 4.00% 29,959
38,619 47,796 819.14 6.00% 38,619
47,796 56,456 1,369.76 8.00% 47,796
56,456 and more 2,062.56 9.30% 56,456
An additional 1% surcharge applies to taxable
income in excess of $1 million.
LUXURY AUTO LIMIT
Taxpayers leasing so-called "luxury" autos must add back an amount to
income to offset the full deduction of these payments. The luxury auto
limits have not changed for 2005, but see post-9/11 depreciation
section:
Year First Second Third Thereafter
2004 2,960 4,800 2,850 1,675
2005 2,960 4,700 2,850 1,675
FICA & SE TAX
2004 2005
Maximum FICA Tax Rate
Wage Base $87,900 $90,000
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 Rate--SE 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) $11,640 $12,00
65-70 (or full retirement age) Unlimited Unlimited
Age 70 and older Unlimited Unlimited
Medicare Part B Premium $66.60/mo 78.20/mo
RETIREMENT PLAN LIMITATIONS
2004 2005
Maximum 401(k)/403(b) Deferral $13,000 $14,000
Maximum Defined Contribution Plan
Contribution 41,000 42,000
Maximum Annual Benefit for
Defined Benefit Plans 165,000 170,000
Annual Compensation Limit
for Computing Plan Benefits 205,000 210,000
Annual Compensation Limit for the
Definition of Highly Compensated
Employee Sec. 414(q)(1) 90,000 95,000
Compensation Minimum for SEP coverage 450 450
Maximum Contribution for SIMPLES 9,000 10,000
401(k) Catch-up Contribution (taxpayers 50 and 3,000 4,000
older)
Simple Catch-up Contribution (taxpayers 50 and 1,500 2,000
older)
Key Employee for Top Heavy Purposes:
* Officers Earning Over $130,000 $135,000
* A 5-percent Owner of Employer
* A 1-percent Owner of Employer Earning Over $150,000 $150,000
TRADITIONAL AND ROTH IRAs
2004 2005
Contribution Limit $3,000 $4,000
Catch-up Contribution (50 and older) 500 500
IRA Deduction Phaseout for Active Participants
Single 50,000-60,000
Married filing jointly 70,000-80,000
IRA Deduction Phaseout for Spousal Contributions
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 Phaseout
Single $100,000
Married Filing Jointly 100,000
Married Filing Separately Ineligible
IRA & PENSION CREDIT
Tax Credit Based on AGI for Various Pension/IRA Plans:
Joint Filers Head-of-Households All Other Filers Credit Rate
$0-$30,000 $0-$22,500 $0-$15,000 50%
30,000-32,500 22,500-24,375 15,000-16,250 20%
32,500-50,000 24,375-37,500 16,250-25,000 10%
Over 50,000 Over 37,500 Over 25,000 0%
ESTATE AND GIFT TAX
Phaseout and Repeal of Estate and Generation-Skipping Transfer Taxes
Estate/GST tax Highest estate
Calendar Year deathtime transfer exemption and gift tax rates
2005 1.5 million 47%
2006 2 million 46%
2007-08 2 million 45%
2009 3.5 million 45%
2010 N/A (taxes repealed) top individual rate
under the bill
(gift tax only)
Gift tax:
Annual Gift Limitation of $11,000 for 2002 through 2005.
Lifetime Exemption of $1 million after Dec. 31, 2001.
EDUCATION-RELATED TAX BENEFITS
Deduction for Qualified Higher Education Costs
Calendar Year Single AGI MFJ AGI Deduction
2004-05 65,000 130,000 4,000
2004-05 80,000 * 160,000 * 2,000
* Taxpayers with AGI above these thresholds are not entitled to a
deduction.
Coverdell Educational Savings Accounts
Annual Contribution Limit $2,000
Income eligibility
MFJ $220,000 *
Single $110,000
* As a couple's income increases from $190,000 to $220,000, their
contribution limit phases out. For Single Taxpayers, it's
$95,000-110,000.
Student Loan Deductions
* Deduct interest for life of loan
Beginning income phase-out range:
Single $50,000
MFJ $100,000
2005 ABOVE LINE DEDUCTIONS
Qualified teacher expenses deductible for AGI $250
Deduction for clean-fuel vehicles * $2,000
* Currently certified are the 2001, 2002, 2003, 2004 and 2005 Toyota
Prius, as well as the 2003 and 2004 Honda Civic Hybrid and Honda Insight
years 2000-2004. Return for year vehicle is first used can be amended to
take deduction. Watch for other models of hybrid gas-electric vehicles
to be certified.
VALUABLE PHONE NUMBERS
Tax Practitioner Hotlines
IRS Practitioner Priority Service (866) 860-4259
IRS--ACS (800) 829-7650
FTB (916) 845-7057
Fax: (916) 845-6377
EDD (916) 654-8316
BOE (800) 401-3661
Application for Taxpayer ID Number
Tele-TIN (800) 829-4933 Fax: (215) 516-3990
Online: www.irs.gov
EDD DE 1 Account Number (916) 654-8706
Fast Tax Facts is designed to provide general guidance to CalCPA
members. CalCPA is not engaged in rendering accounting or other
professional advice. Numbers in Fast Tax Facts are subject to change.
The online version of Fast Tax Facts will be updated for tax law changes. Check it out at www.calcpa.org/fasttaxfacts. RELATED ARTICLE: POST-9/11 FED BONUS DEPRECIATION Additional 30 percent immediate write-off Write-Off A reduction in the value of an asset or earnings by the amount of an expense or loss. Companies are able to write off certain expenses that are required to run the business, or have been incurred in the operation of the business and detract from retained revenues. for new property: * Acquired after Sept. 11, 2001 and before May 6, 2003 * Recovery period must be 20 years or less Additional 50 percent immediate write-off for new property: * Acquired after May 5, 2003 and before Jan. 1, 2005 * Recovery period must be 20 years or less Additional depreciation for vehicles: * Vehicles acquired within time period mentioned above can claim an additional $4,600 (total $7,660) of depreciation in 2002 and Jan. 1, 2003-May 5, 2003 (to be adjusted for business use percentage). Vehicles placed in service May 6, 2003 or later can claim an additional $7,650 (total $10,710) of depreciation. RELATED ARTICLE: AB 115 CONFORMITY In October October: see month. , Gov. Schwarzenegger signed AB 115, which generally conforms California California (kăl'ĭfôr`nyə), most populous state in the United States, located in the Far West; bordered by Oregon (N), Nevada and, across the Colorado River, Arizona (E), Mexico (S), and the Pacific Ocean (W). tax law to the federal Internal Revenue Code The Internal Revenue Code is the body of law that codifies all federal tax laws, including income, estate, gift, excise, alcohol, tobacco, and employment taxes. These laws constitute title 26 of the U.S. Code (26 U.S.C.A. § 1 et seq. as of Jan. 1, 2005. What, if any, effect AB 115 has on the information included in Fast Tax Facts was undetermined by press time. To read the bill, visit http://leginfo.ca.gov/pub/bill/asm/ab_0101-0150/ab_115_bill_20050914_enrolled.html. |
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