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Leo C. Neuman Ltd. CPA
113 Main Street S.
Stillwater, MN, 55082-5196
Phone: (651) 439-5990
© 2012 Leo C. Neuman Ltd.
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Leo C. Neuman Ltd. | Certified Public Accountant

113 Main Street S., Stillwater, MN 55082-5196   Phone: (651) 439-5990   Fax: (651) 439-6070

Tax Rates

Tax Rates

  • Corporate Income Tax Rates—2012, 2011

    Taxable income overNot overTax Rate
    $0 $50,000 15%
    $50,000 $75,000 25%
    $75,000 $100,000 34%
    $100,000 $335,000 39%
    $335,000 $10,000,000 34%
    $10,000,000 $15,000,000 35%
    $15,000,000 $18,333,333 38%
    $18,333,333 .......... 35%

    Personal Service Corporations—Personal service corporations are subject to a flat tax of 35% regardless of their income.

    Personal Holding Company—Personal holding companies are subject to an additional tax at 15% (higher in 2002 and prior years) on any undistributed personal holding company income. (Code Sec. 541)

    Accumulated Earnings Tax—In addition to the regular tax, a corporation may be liable for an additional tax at 15% (higher in 2002 and prior years) on accumulated taxable income in excess of $250,000 ($150,000 for personal service corporations). (Code Sec. 531)

    Miscellaneous Business Data

    Maximum Section 179 Expense Deduction

    2012 2011 2010 2009 2008 2007
    $139,000 $500,000 $500,000 $250,000 $250,000 $125,000

    Phase-out—$560,000 for 2012; $2,000,000 for 2011; $2,000,000 for 2010; $800,000 for 2009; $800,000 for 2008; $500,000 for 2007; $430,000 for 2006.

    Note: An increased Sec. 179 deduction is available to enterprise zone businesses and renewal community business in certain situations. In addition, an increased Sec. 179 deduction is available for certain Sec. 179 Disaster Assistance property. Check the rules in place at the time the property is placed in service. Finally, the maximum deduction for heavy sport utility vehicles and certain other vehicles is restricted to $25,000.

    Business expensing deduction: New Equipment—$2,000,000
    Business expensing deduction: Used Equipment and Software —$500,000
    Self-Employed health insurance deduction: 100% Tax Facts for Individuals—2012

  • Tax Facts for Individuals—2012

    Tax Rate--Single Taxpayers--2012

    Taxable IncomeTax
    OverBut not overTax+%On amount over
    $ 0 $ 8,700 $ 0.00 10 $ 0
    8,700 35,350 870.00 15 8,700
    35,350 85,650 4,867.50 25 35,350
    85,650 178,650 17,442.50 28 85,650
    178,650 388,350 43,482.50 33 178,650
    388,350 ....... 112,683.50 35 388,350

    Tax Rates--Married Individuals Filing Joint and Surviving Spouses--2012

    Taxable IncomeTax
    OverBut not overTax+%On amount over
    $ 0 $ 17,400 $ 0.00 10 $ 0
    17,400 70,700 1,740.00 15 17,400
    70,700 142,700 9,735.00 25 70,700
    142,700 217,450 27,735.00 28 142,700
    217,450 388,350 48,665.00 33 217,450
    388,350 ....... 105,062.00 35 388,350

    Tax Rates--Married Individuals Filing Separate--2012

    Taxable IncomeTax
    OverBut not overTax+%On amount over
    $ 0 $ 8,700 $ 0.00 10 $ 0
    8,700 35,350 870.00 15 8,700
    35,350 71,350 4,867.50 25 35,350
    71,350 108,725 13,867.50 28 71,350
    108,725 194,175 24,332.50 33 108,725
    194,175 ....... 52,531.00 35 194,175

    Tax Rates--Heads Of Households--2012

    Taxable IncomeTax
    OverBut not overTax+%On amount over
    $ 0 $ 12,400 $ 0.00 10 $ 0
    12,400 47,350 1,240.00 15 12,400
    47,350 122,300 6,482.50 25 47,350
    122,300 198,050 25,220.00 28 122,300
    198,050 388,350 46,430.00 33 198,050
    388,350 ....... 109,229.00 35 388,350

    Tax Rates--Estates And Trusts--2012

    Taxable IncomeTax
    OverBut not overTax+%On amount over
    $ 0 $2,400 $ 0.00 15 $ 0
    2,400 5,600 $ 360.00 25 2,400
    5,600 8,500 1,160.00 28 5,600
    8,500 11,650 1,972.00 33 8,500
    11,650 ..... 3,011.50 35 11,650

    Long-Term Capital Gains and Qualifying Dividends--2012

    For taxpayers in the 10% or 15% bracket--0%
    For taxpayers in higher brackets--15%
    Tax on un-recaptured Sec. 1250 gain--25%
    Capital gain rate on collectibles--28%

    Standard Deduction--2012

    Filing StatusStandard Deduction
    Married filing joint and surviving spouses $11,900
    Heads of Household 8,700
    Single individuals 5,950
    Married, filing separate 5,950

    Dependent's Standard Deduction--No more than the greater of $950 or $300 plus the individual's earned income.

    Additional standard deduction for aged and blind--$1,150 each ($1,450 if individual is unmarried and not surviving spouse)

    Personal Exemption--2012

    Amount--$3,800

    Savings Bond/Higher Education Expense Exclusion--2012

    Modified adjusted gross income phase-out--married, joint, $109,250--$139,250; all other filing status, $72,850--$87,850

    American Opportunity Tax Credit (Hope Credit)--2012

    100% of first $2,000 of education expenses; 25% of expenses between $2,000 and $4,000 (maximum credit $2,500)

    Phase-out begins at modified adjusted gross income of $160,000 joint return; $80,000 all others.

    Credit completely phased out at $180,000 ($90,000).

    Lifetime Learning Credits--2012

    20% of the first $10,000 of qualified education expenses ($2000)

    Phase-out begins at modified adjusted gross income of $104,000 joint return; $52,000 all others.

    Credit completely phased out at $124,000 joint returns; $62,000 all others.

    Interest on Education Loans--2012

    Maximum interest deduction--$2,500

    Modified adjusted gross income phase-out range--Married, joint, $125,000--$155,000; all other filing status, $60,000--$75,000

    Qualified Transportation Fringe Benefit Exclusion--2012

    Commuter highway vehicle and transit pass--$125

    Qualified parking--$240

    Qualified bicycle allowance--$20 per month

    Standard Mileage rate for business driving – 55.5 cents

    Earned Income Tax Credit (EITC)--2012

    Number of Qualifying Children
    ItemOneTwo of MoreThree or MoreNone
    Earned Income Amount $ 9,320 $ 13,090 $ 13,090 $ 6,210
    Maximum Amount of Credit 3,169 5,236 5,891 475
    Threshold Phase-out (single, surviving spouse or head of household) 17,090 17,090 17,090 7,770
    Completed Phase-out (single, surviving spouse or head of household) 36,920 41,952 45,060 13,980
    Threshold Phase-out (married, joint) 22,300 22,300 22,300 12,980
    Completed Phase-out (married, joint) 42,130 47,162 50,270 19,190

    Excessive Investment Income for Earned Income Tax Credit--$3,200

    Adoption Expenses--2012

    Maximum credit for child with special needs--$12,650

    Maximum credit, other adoptions--$12,650

    Other adoptions, gross income exclusion, qualified expenses up to $12,650

    Phase-out range, modified adjusted gross income--$189,710 to $229,710

    Miscellaneous--2012

    Child Tax Credit--$1,000; phase-out MAGI $110,000 joint, $75,000 single, $55,000 MFS; refundable $3,000 Sec. 24(d)(1)(B)(i)

    Unified Credit Against Estate Tax (exemption) $5,120,000

    Annual Exclusion for Gifts--$13,000

    Annual Exclusion for Gifts to Spouse not a Citizen--$139,000

    Notice of Large Gifts Received from Foreign Persons--$14,723

    Interest on Certain Portion of Estate Tax Payable in Installments (Sec. 6166; 2% portion)--$1,390,000

    Valuation of Qualified Real Property in Decendent's Gross Estate (Sec. 2032A)--$1,040,000

    Unearned Income of Minor Child (Kiddie Tax)--$950 ($9,500 for parental election)

    Foreign Earned Income Exclusion--$95,100

    Minor Child subject to Kiddie Tax--up to age 18 or full-time student over 18 with earned income no more than 1/2 support under age 24.

    Periodic Payments Received under Long-Term Qualified Care Insurance Contracts or Certain Life Insurance Contracts Per Diem Limitation--$310

    Loan limit on Agricultural Bonds for First-Time Farmers--$488,600

    Prior-year safe harbor for estimated taxes of higher-income – 110% of your 2011 tax liability

    Social Security--2012

    Maximum Taxable Earnings Wage Base--$110,100

    Household (domestic) employee cash wages threshold--$1,800

    Quarter of coverage--$1,130

    Retirement Savings Test--$14,640 (under full retirement age); $38,880 (year of full retirement age)

    For a fact sheet on the COLA go to www.ssa.gov/pressoffice/factsheets/colafacts2012.htm

    Social Security Tax Rate: Employers – 6.2%

    Social Security Tax Rate: Employees – 4.2% (As of 1/1/12 – effective through Feb 28, 2012 – seek latest congressional decision after that)

    Social Security Tax Rate : Self Employed – 10.4%

    Medicare Tax Rate : Employers & Employees – 1.45%

    Health Savings Accounts--2012

    Maximum annual HSA contributions deductible--$3,100 for individual; $6,250 for family coverage

    Catch-up contributions for individuals 55 or older, (but less than 65), is $1,000 (pro rate for year).

    Deductible Amounts that define High Deductible Plan:

    Annual Deductible Deductibles, Co-Payments and other Amounts

    Not Less Than but not Premiums Not to Exceed

    Self Only $1,200 $ 6,050

    Family Coverage 2,400 12,100

    Retirement Accounts -- 2012

    Maximum contribution for a Traditional /Roth IRA -- $5,000 if under age 50 -- $6,000 if 50 or older
    Maximum employee contribution to a SIMPLE IRA -- $11,500 if under age 50 -- $14,000 if 50 or older
    Maximum Contribution to SEP IRA – 25% of eligible compensation up to $49,000
    401(k) Maximum employee contribution limit -- $16,500 if under age 50 -- $22,000 if 50 or older

    Eligible Long-Term Care Premiums--2012

    Attained Age Before the Close of the Tax YearLimitation on Premiums
    40 or less $ 350
    More than 40 but not more than 50 660
    More than 50 but not more than 60 1,310
    More than 60 but not more than 70 3,500
    More than 70 4,370

    Persons Against Which a Federal Tax Lien is Not Valid--2012

    --Purchasers in a casual sale, for less than $1,430. --A mechanic's lienor that repairs or improved certain residential property if the contract price is not more than $7,160.

    Property Exempt from Levy--2012

    Property exempt from levy under Sec. 6334(a)(2) cannot exceed $8,570. Property exempt from levy under Sec. 6334(a)(3) (books and tools for trade or business) cannot exceed $4,290.

Copyright 2003-2011 by A/N Group, Inc. This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is distributed with the understanding that the publisher is not engaged in rendering legal, accounting, or other professional service. If legal advice or other expert assistance is required, the services of a competent professional should be sought. The information is not necessarily a complete summary of all materials on the subject.--ISSN 1089-1536

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