| Tax Tables |
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401(K) Contribution Limits
Amount of Estate Assets Exempt from Federal Estate Tax
Annual Gift Tax Exclusion
Tax Treatment of Investment Income for Children Under Age 14
IRS-Approved Auto Mileage Rates
Reduction of Itemized Deductions for High-Income Taxpayers
Long-Term Capital Gains Tax Rates (Assets Held More Than One Year)
Self-Employed Health Insurance Deductions
Amount of Equipment Purchases Eligible for Expensing (Section 179) in First Year
| 401(k) Contribution Limits |
Year |
Employee
Contribution Limit |
Additional "Catch-Up" Contribution for
Employees Age 50 & Over |
| 2001 |
$10,500 |
Not Available |
| 2002 |
$11,000 |
$1,000 |
| 2003 |
$12,000 |
$2,000 |
| 2004 |
$13,000 |
$3,000 |
| 2005 |
$14,000 |
$4,000 |
| 2006 |
$15,000 |
$5,000 |
| 2007 |
$15,500 |
$5,000 |
Notes: The law doesn't require employees to contribute any minimum amount, but the 401(k) plan itself may require a minimum contribution of a certain percentage of salary.
After 2006, the maximum contribution amounts will be adjusted yearly for inflation.
The law also imposes an overall limit on the combined amount that can be contributed to an employee's 401(k) plan annually by employee and employer. Most employees need not be concerned with this limit. |
Amount of Estate Assets
Exempt from Federal Estate Tax |
| Year |
Exempt Amount |
| 2001 |
$675,000 |
| 2002 |
$1 million |
| 2003 |
$1 million |
| 2004 |
$1.5 million |
| 2005 |
$1.5 million |
| 2006 |
$2 million |
| 2007 |
$2 million |
| 2008 |
$2 million |
| 2009 |
$3.5 million |
| 2010 |
Estate Tax Repealed |
| Annual Gift Tax Exclusion |
| Tax Year |
Exclusion |
| 2001 |
$10,000 |
| 2002 |
$11,000 |
| 2003 |
$11,000 |
| 2004 |
$11,000 |
| 2005 |
$11,000 |
| 2006 |
$12,000 |
| 2007 |
$12,000 |
| Note: The amount of the annual gift tax exclusion is indexed yearly for inflation. However, the law says the amount of the exclusion can only be increased in $1,000 increments. Thus, the exclusion amount will not increase until such time as inflation increases sufficiently for the exclusion amount to go from $12,000 to $13,000. |
| Tax Treatment of Investment Income for Children Under Age 18 |
| Tax Year |
Tax-Free |
Taxed At Child's
Tax Rate |
Taxed At Parents'
Tax Rate |
| 2001 |
First $750 |
Next $750 |
Over $1,500 |
| 2002 |
First $750 |
Next $750 |
Over $1,500 |
| 2003 |
First $800 |
Next $800 |
Over $1,600 |
| 2004 |
First $800 |
Next $800 |
Over $1,600 |
| 2005 |
First $800 |
Next $800 |
Over $1,600 |
| 2006 |
First $850 |
Next $850 |
Over $1,700 |
| 2007 |
First $850 |
Next $850 |
Over $1,700 |
| Note: These amounts are indexed yearly for inflation. |
| IRS-Approved Auto Mileage Rates |
| Tax Year |
Business Use |
Volunteer Charity |
Job-Related Move |
Medical Care |
| 2001 |
34.5 cents |
14 cents |
12 cents |
12 cents |
| 2002 |
36.5 cents |
14 cents |
13 cents |
13 cents |
| 2003 |
36.0 cents |
14 cents |
12 cents |
12 cents |
| 2004 |
37.5 cents |
14 cents |
14 cents |
14 cents |
| Jan 1 - Aug 31, 20005 |
40.5 cents |
14 cents |
15 cents |
15 cents |
| Sep 1 - Dec 31, 2005 |
48.5 cents |
14 cents |
22 cents |
22 cents |
| 2006 |
44.5 cents |
14 cents |
18 cents |
18 cents |
| 2007 |
48.5 cents |
14 cents |
20 cents |
20 cents |
| Note: The mileage allowances are adjusted periodically for changes in diriving costs. |
| Reduction of Itemized Deductions for High-Income Taxpayers |
| Most itemized deductions are reduced by 3% of the amount by which a couple's AGI (adjusted gross income) exceeds certain thresholds. However, taxpayers can't lose more than 80% of affected itemized deductions due to the 3% cutback. |
| Tax Year |
AGI Income Threshold |
| 2001 |
$132,950 |
| 2002 |
$137,300 |
| 2003 |
$139,500 |
| 2004 |
$142,700 |
| 2005 |
$145,950 |
| 2006 |
$150,500 |
| 2007 |
$156,400 |
Notes: These thresholds are indexed yearly for inflation.
For 2006, the reduction in itemized deductions is only two-thirds the amount under the 3%/80% formula above (e.g., a reduction of 2% rather than 3%).
The income threshold for married taxpayers filing separately is one-half of the above amount. |
Maximum Long-Term Capital Gains Tax Rates
(Assets Held More Than One Year) |
| Type of Asset/Holding Period |
Maximum Income Tax Rate |
| Most Types of Investments, Held More Than One Year |
Sales between Jan. 1—May 5, 2003  20% (10% for taxpayers below 25% bracket)
Sales between May 6, 2003—Dec. 31, 2007 15% (5% for taxpayers below 25% bracket)
Sales in 2008 Â 15% (0% for taxpayers below 25% bracket)
Sales after 2008 Â 20% (10% for taxpayers below 25% bracket) |
| Most Types of Investments, Held More Than Five Years |
Sales between Jan. 1-May 5, 2003 (8% if taxpayer is below 25% bracket)
Sales between May 6, 2003-Dec. 31, 2008 (Same rules as for most assets held more than one year)
Sales after 2008 Â 18% if asset acquired after 2000 (8% for taxpayers below 25% bracket) |
| Collectibles, Held More Than One Year |
28% |
| Depreciable Real Estate, Held More Than One Year |
25% to extent of depreciation deductions previously claimed |
| Note: Capital losses used to offset the taxpayer's capital gains, plus up to $3,000 of other income, such as salary. (Any excess losses can be carried over to a future year.) |
| Self-Employed Health Insurance Deductions |
| Tax Year |
Deductible Portion |
| 2001 |
60% |
| 2002 |
70% |
| 2003 and thereafter |
100% |
Dollar Amount of Purchased Equipment
Eligible for Expensing (Section 179) |
| Tax Year |
Limit |
| 2001 |
$24,000 |
| 2002 |
$24,000 |
| 2003 |
$100,000 |
| 2004 |
$102,000 |
| 2005 |
$105,000 |
| 2006 |
$108,000 |
| 2007 |
$108,000 indexed for inflation |
| 2008 and thereafter |
$25,000 |
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