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What are the standard limits for "Qualified Plans" (401K's and IRA's, Keogh, 403b, 457 Plan)
- Elective Deferral $17,500
- Catch Up $5,500 ($23,000) Must be 50+
- Max >of$51,000 or 100%
- Max Considered Compensation $255,000
What is different about the SEP IRA?
- -There is an employer contribution limit of 25% or $51,000.
- -Funded COMPLETELY BY EMPLOYER
- -Age 21 and worked for last 3 of 5 years
- -employee must have earned at least $550
- -Catch up contributions to the IRA that holds the SEP but the holder must be 50 or older, limit is $6,500
- For small employers >100
- -Employee must have earned at lease $5000
- -employee limit $12,000
- -catch up $2,500 ($14,500)
- Limit of $5,000
- Catch up $1,000
What are the special restrictions on the Traditional IRA if you ARE covered by a plan at work.
- Single or Head -
- $59< =full deduction, $59 to $69 = partial, $69+ no TAX deduction.
- Married - $95, $115,
- Married filing separately >$10 if above $10, no deduction.
Traditional IRA - What are the restrictions if you aren't covered at work?
- Single -No restrictions
- Jointly with uncovered spouse - no restrictions
- Spouse covered - $178, $188
- Married filing separately with covered spouse - $10 and $10
- Limit of $5,500
- Catch up $1,000
- Single, Single Head, $112,$127
Contribution limit of $2,000 / beneficiary under 18
Max of 5 times the gift tax exclusion which is $14,000 for 2013. But you can't give them anything else for 5 years.
Life time typically $300,000
What is the American Taxpayer Relief Act? (ATRA)
- -$5,250,000 exemption
- -40% tax rate
- -$10,500,000 to heirs tax free
- Even if the estate falls below the 5 mil benchmark, the Generation Skipping Transfer form 706 must be filed.
- Estate Tax form
- Must be filed on an estate larger than $600
- Form is for tax emposed on income earned by the estate.
form that computes the tax when the estate is transferred.
Gift Tax Exclusion
Lifetime Gift Tax Exemption
Generation Skipping Transfer Tax
two generations or unrelated person 37.5 years younger
Kiddy Tax Exclusion
- -Under 19 or 24 if student
- -No tax for first $1,000
- $1,000 to $2,000 taxed at child rate
- -above $2,000 taxed at parent's rate
What are the lowest and highest tax brackets?
- -MFJ above $450,000 = 39.6%
What are the Long Term Capital Gains Rates?
- -10% to 15% bracket=0%
- -25% to 35% = 15%
- -39.6% = 20%
Non qualified dividends and SHORT TERM CAPITAL GAINS are taxed as ordinary income
What is Qualified Dividend Income
- -paid by U.S. Corp or qualified foreign Corp
- -Must meet the holding period. (>60 days on either side of the ex-dividend date)
Payroll tax rates
- 6.2% for employed
- 12.4% for self employed
Income subject to Social Security
Child Tax Credit
$1,000 per child