Adjustments for inflation are made to various tax numbers each year, and tax laws with phase-in and phase-out provisions cause some numbers to change annually. The numbers for 2006 in the chart below apply to your 2006 returns, and the numbers for 2007 should be used in your 2007 tax planning.
– 2007 – – 2006 –
* Standard deduction
- Single $5,350 $5,150
- Married filing jointly 10,700 10,300
- Married filing separately 5,350 5,150
- Head of household 7,850 7,550
- Additional deduction –
Single 65 and older/blind $1,300 $1,250
Married 65 and older/blind 1,050 1,000
* Personal exemption $3,400 $3,300
* Personal exemption phase-out (AGI)
- Single $156,400-278,900 $150,500-273,000
- Joint returns & surviving spouses 234,600-357,100 225,750-348,250
- Married filing separately 117,300-178,550 112,875-174,125
- Head of household 195,500-318,000 188,150-310,650
* Limit on itemized deductions (AGI)
- Single/joint/head of household $156,400 $150,500
- Married filing separately 78,200 75,250
* Adoption credit $11,390 $10,960
* Kiddie tax threshold $1,700 $1,700
* Nanny tax threshold $1,500 $1,500
* Social security tax wage base $97,500 $94,200
* Medicare tax wage base No limit No limit
* Social security earnings limit
- Under age 65 $12,960 $12,480
- Age 65 and over No limit No limit
* Retirement plan contribution limits
- IRA (under age 50) $4,000 $4,000
- IRA (age 50 or over) 5,000 5,000
- SIMPLE (under age 50) 10,500 10,000
- SIMPLE (age 50 or over) 13,000 12,500
- 401(k) (under age 50) 15,500 15,000
- 401(k) (age 50 or over) 20,500 20,000
* IRA deductibility phase-out (AGI)
- Single/head of household $52,000-62,000 $50,000-60,000
- Joint returns & surviving spouses 83,000-103,000 75,000-85,000
- Married filing separately 0-10,000 0-10,000
- When spouse has company pension 156,000-166,000 150,000-160,000
* Automobile standard mileage rate
- Business 48.5¢ 44.5¢
- Charitable work 14¢ 14¢
- Medical/moving expense 20¢ 18¢
* Business equipment expensing limit $112,000 $108,000
* Total purchase limit for full $450,000 $430,000 expensing deduction
* Top estate tax rate 45% 46%
* Estate tax exemption $2 million $2 million
* Annual gift tax exclusion (per donee) $12,000 $12,000