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December 2007 Newsletter continued |
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EDITOR'S NOTE: Should you have questions with respect to the information contained in this newsletter or need help with your personal or business financial, tax and accounting activities, please call. |
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E-Mail Halliday@hallidaycpa.com |
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This newsletter offers factual and up-to-date information on the subjects discussed, but should not be regarded as a complete analysis of these subjects. No party assumes liability for any loss or damage resulting from reliance or use of this material. |
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years old.
This is bad news for families planning on giving appreciated assets to kids to sell in 2008 (the capital gain rate in 2008 can potentially be 0%). Very little of the child’s gain is likely to qualify for the 0% rate unless the parents are in the 10% or 15% tax bracket (taxable income under $64,000). Parents above the 15% tax bracket this year, who have kids not subject to the kiddie tax in 2007, should consider gifting assets to their kids to sell in 2007. This way, the gains will be taxed at 5% instead of 15%. |
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Retirement plans and social security increases for 2008 |
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The Social Security was base is rising to $102,000 in 2008, a $4,500 increase. Tax rates stay the same: 6.2% for FICA and 1.45% for Medicare.
There is no change in the 401 (k) maximums; $15,500, those born prior to 1959 can contribute an additional $5,000. The SIMPLE maximum remains at $10,500, $13,000 if born before 1959. The pay in ceiling for defined-contribution plans, Keoghs and profit sharing plans is $46,000 for 2008. IRA’s increase to $5,000.
Social security benefit checks will be 2.3% larger in 2008. The earnings limits for beneficiaries will rise as well. Individuals between ages 62 and 66 by the end of 2008 can make $13,560. Individuals who turn 66 in 2008 will not lose benefits if they earn $36,120 or less before reaching that age. There is no cap for individuals over age 66. |