Tax Tips: 2000

INCLUDED IN INCOME
wages salary fees tips commissions business profits gain on sale of real estate, securities, and other property interest received rents collected dividends royalties alimony and separate- maintenance payments sick pay	annuities and pensions, to the extent the return exceeds investment income from an interest in an estate or trust prizes and awards some fringe benefits up to 85% of social security benefits gambling winnings net of losses strike benefits unemployment compensation hobby income barter income illegal income

NOT INCLUDED IN INCOME

gifts and inheritances
interest from certain state and municipal bonds (or received by mutual funds that hold them)
employer reimbursements for business expenses (that you don't deduct)
returns of capital
gain up to $500,000 on sale of primary residence (under certain conditions)
some or all of Social Security benefits
employer-paid health coverage for immediate family
compensation for sickness or injury
child support

welfare
accident-and health-insurance proceeds
life-insurance proceeds (estate tax may apply)
veterans benefits
scholarships and fellowships to a degree candidate in 2000 if used for certain purposes
14 days' rental income from house or vacation home
interest on Education Savings Bonds
dependent-child wages up to $2,800
child's investment income up to $700
federal income-tax refunds

FREE BOOKLET ON TAX & FINANCIAL PLANNING

For more tips please contact us by e-mail or phone to get your free booklet on tax and financial planning. Topics covered in this booklet will include:

Summary of 2000 changes
Guidelines and strategies
Alternative Minimum Tax (AMT)
Tax & financial planning for your family
Insurance
Investments
Retirement
Real estate
Estate & Gift Taxes
Business Income Taxes


Auto depreciation (max.)			Social Security earnings limit
1st year		$ 3,060	under age 65	$ 10,080
2nd year		$ 4,900	age 65 or older	no limit
3rd year		$ 2,950	Federal per-diem travel rates
thereafter		$ 1,775	high-cost area	$ 201
Personal exemption:		$ 2,800	low-cost area	$ 124
Standard mileage rates:			Automatic Exemption from Estate Tax
				$ 675,000
		$ 0.325
cars used in business
cars used for charity				$ 76,200
	$ 0.140		Wage base: Social Security tax
cars used for moving or medical transport
				no limit
			Taxable wage base: Medicare
		$ 0.100
			SEP's cover employees who earn	$ 450
Phaseout of personal exemption starts with income at:
			2000 deferral limits-401(K), SEPs:	$ 10,500
				5 %
			2000 tax rate on luxury cars:
		$ 193,400
couple
				$ 38,000
			Luxury cars defined as costing*
		$ 128,950
single
Phaseout of itemized deduction affects taxpayers with income over:			*You can add items costing up to $1000 without increasing the tax.
	$ 128,950


2000 INCOME TAX RATES

Taxable Income				Tax Rate (%)	Total Tax at Breakpoint	Phase-out Range of Personal Exemptions
	0 - 43,850			15	$ 6,577.50	$ 193,400 - 315,900
	43,851 - 105,950			28	23,965.50
Married, Filing	105,951 - 161,450			31	41,170.50
Jointly	161,451 - 288,350			36	86,854.50
	288,351 - and up			39.6

	0 - 35,150			15	5,272.50	161,150 - 283,650
	35,151 - 90,800			28	20,854.50
Head of	90,801 - 147,050			31	38,292.00
Household	147,051 - 288,350			36	89,160.00
	288,351 - and up			39.6

	0 - 26,250			15	3,937.50	128,950 - 251,450
	26,251 - 63,550			28	14,381.50
Unmarried	63,551 - 132,600			31	35,787.00
Individual	132,601 - 288,350			36	91,857.00
	288,351 - and up			39.6

	0 - 21,925			15	3,288.75	96, 700 - 157, 950
	21,926- 52,975			28	11,982.75
Married, Filing	52,976 - 80,725			31	20,585.25
Separately	80,726- 144,175			36	43,427.25
	144,176 - and up			39.6

	0 - 1,750			15	262.50
	1,751 - 4,150			28	934.50
Estates	4,151 - 6,300			31	1,601.00
& Trusts	6,301 - 8,650			36	2,447.00
	8,651 - and up			39.6
EEXEMPTION PER PERSON: $2,800
2000 STANDARD DEDUCTION
	Under age 65		Age 65 or over
Married, Filing Jointly	$	7,350	8,200		Standard deduction for an individual claimed as a dependent by another cannot exceed the greater of $700 or the dependent's earned income + $250, up to the normal standard deduction. If one spouse filing separately itemizes, the other gets no standard deduction.
Head of Household		6,450	7,550
Unmarried Individuals		4,400	5,500
Married, Filing Separately		3,675	4,100
Taxpayers who are legally blind get an extra $850 if married, $1,100 if single.
CREDITS

Earned-Income credit		Credit is up to $4,000. Earnings limit for eligibility is $27,413 for those with one qualifying child, or $31,152 for those with two or more children. Credit phases out as income rises. There's a smaller credit (up to a few hundred dollars) for couples with no children. Definition of earnings for EIC eligibility purposes is narrow. Social Security number is required for all.

Dependent Care credit		For care for your child under age 13 or disabled dependent while you work: 30% of up to $2,400 for one child, and of up to $4,800 for more than one. Above $10,000 AGI, credit gradually drops to 20%

Credit for elderly disabled		Credit is 15% of qualifying income; available to permanently disabled who are age 65 or over.