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2010 Tax Updates |
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| INDIVIDUAL |
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| BUSINESS |
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| FILING REQUIREMENTS FOR MOST TAX PAYERS |
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If your filing status is |
AND at the end of 2010 you were |
THEN file a return if your gross
income was at least |
Single |
Under 65
65 or older |
$9,350
$10,750 |
Married filing jointly |
Under 65 (both spouses)
65 or older (one spouse)
65 or older (both spouses) |
$18,700
$19,800
$20,000 |
Married filing separately |
Any age |
$3,650 |
Head of household |
Under 65
65 or older |
$12,050
$13,450 |
Qualifying widow(er) with dependent child |
Under 65
65 or older |
$15,050
$16,150 |
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| FILING REQUIREMENTS FOR DEPENDENTS |
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If your parent (or someone else) can claim you as a dependent, use this chart to see if you must file a return.
In this chart, unearned income includes taxable interest, ordinary dividends, and capital gain distributions. Earned income includes wages, tips, and taxable scholarship and fellowship grants. Gross income is the total of your unearned and earned income.
SINGLE DEPENDENTS
Were you either age 65 or older or blind?
No. You must file a return if any of the following apply.
• Your unearned income was over $950.
• Your earned income was over $5,700.
• Your gross income was more than the larger of $950, or
• Your earned income (up to $5,400) plus $300.
Yes. You must file a return if any of the following apply.
• Your unearned income was over $2,350 ($3,750 if 65 or older and blind).
• Your earned income was over $7,100 ($8,500 if 65 or older and blind).
• Your gross income was more than the larger of–
• $ 2,350 ($3,750 if 65 or older and blind), or
• Your earned income (up to $5,400) plus $1,700 ($3,100 if 65 or older and blind).
MARRIED DEPENDENTS
Were you either age 65 or older or blind?
No. You must file a return if any of the following apply.
• Your unearned income was over $950.
• Your earned income was over $5,700.
• Your gross income was at least $5 and your spouse files a separate return and itemizes deductions.
• Your gross income was more than the larger of —
$950, or Your earned income (up to $5,400) plus $300.
Yes. You must file a return if any of the following apply.
• Your unearned income was over $2,050 ($3,150 if 65 or older and blind).
• Your earned income was over $6,800 ($7,900 if 65 or older and blind).
• Your gross income was at least $5 and your spouse files a separate return and itemizes deductions.
• Your gross income was more than the larger of—
$2,050, or ($3,150 if 65 or older and blind) or
• Your earned income (up to $5,400) plus $1,400 ($2,500 if 65 or older and blind).
OTHER SITUATIONS WHEN YOU MUST FILE A 2010 RETURN
You must file a return if any of the four conditions below apply for 2010.
1. You owe any special taxes, including any of the following.
a. Alternative minimum tax.
b. Additional tax on a qualified plan, including an individual retirement arrangement (IRA), or other tax-favored account. But if you are filing a return only because you owe this tax, you can file Form 5329 by itself.
c. Household employment taxes. But if you are filing a return only because you owe this tax, you can file Schedule H by itself.
d. Social security and Medicare tax on tips you did not report to your employer or on wages you received from an employer who did not withhold these taxes.
e. Write-in taxes, including uncollected social security and Medicare or RRTA tax on tips you reported to your employer or on group-term life insurance and additional tax on health savings account distributions. See the instructions for line 63 on page 42.
f. Recapture taxes. See the instructions for line 44, that begin on page 33, and line 63, on page 42.
g. Additional tax on a health savings account from Form 8889, Part III.
2. You received any advance earned income credit (EIC) payments from your employer. These payments are shown in Form W-2, box 9.
3. You had net earnings from self-employment of at least $400.
4. You had wages of $108.28 or more from a church or qualified church-controlled organization that is exempt from employer social security and Medicare taxes.
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| STANDARD DEDUCTION |
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If your filing status is |
Base Amount
(Amount USD) |
Additional amount for blindness or age over 65 years (Amount USD) |
Single |
$5,700 |
$1,400 |
Married filing jointly |
$11,400 |
$1,100 |
Married filing single |
$5,700 |
$1,100 |
Head of household (HoH) |
$8,350 |
$1,400 |
Qualifying widow(er) with dependant child |
$11,400 |
$1,100 |
Dependant of another |
$950 or Earned income + $300 |
$1,100 or $1,1400 if single or HoH |
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| EXEMPTION AMOUNTS |
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Personal and dependent |
$3,650.00 |
Estate Amount |
$600.00 |
Simple Trust * |
$300.00 |
Complex Trust* |
$100.00 |
* Exemption not allowed in final year |
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| STANDARD MILEAGE RATES |
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Type |
Period |
Mileage rate per mile |
Business Mileage |
Beginning January 1, 2010 |
50 cents per mile |
Charitable Mileage |
|
14 cents per mile |
Medical/Moving Mileage |
Beginning January 1, 2010 |
16.5 cents per mile |
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| TRADITIONAL IRA LIMITS |
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| IRA contribution limits for those who do not participate in employee sponsored plan |
| Regularn contributions |
$5,000.00 |
| ‘Catch up’ contributions for taxpayers 50 and over |
$6,000.00 |
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| PHASE OUT OF IRA DEDUCTIONS |
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FILING STATUS |
AGI begin phase out |
AGI fully phased out |
Single or Married filing separate and lived apart from spouse for all of 2010 |
$56,000 |
$66,000 |
Married filing jointly (if spouse is covered by a pension plan) |
$89,000 |
$109,000 |
Married filing jointly (if spouse is not covered by a pension plan) |
$167,000 |
$177,000 |
Married filing separate |
0 |
$10,000 |
Head of Household |
$56,000 |
$66,000 |
Qualifying Widow(er) |
$89,000 |
$109,000 |
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| DEPENDENT CARE CREDIT CALCULATION |
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To determine the amount of dependent care credit, multiply the amount of your work related expenses (after applying earned income and dollar limits) by percentage mentioned in column 3. To determine what percentage you need to use, find out your adjusted gross income (AGI) from Form 1040. The following table shows the percentage to be used based on your AGI. The maximum eligible to be multiplied with these percentages is $3,000 per child and $6,000 per return.
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If your adjusted gross income is |
Then the percentage is |
Over (USD) |
But not over (USD) |
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0 |
15,000 |
35 |
15,000 |
17,000 |
34 |
17,000 |
19,000 |
33 |
19,000 |
21,000 |
32 |
21,000 |
23,000 |
31 |
23,000 |
25,000 |
30 |
25,000 |
27,000 |
29 |
27,000 |
29,000 |
28 |
29,000 |
31,000 |
27 |
31,000 |
33,000 |
2 |
33,000 |
35,000 |
25 |
35,000 |
37,000 |
24 |
37,000 |
39,000 |
23 |
39,000 |
41,000 |
22 |
41,000 |
43,000 |
21 |
43,000 |
No limit |
20 |
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| MEDICAL SAVINGS ACCOUNT (MSA) |
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2010 Premium For High Deductible |
Self Coverage |
$2,000 - $3,000 |
Family Coverage |
$4,000 - $6,050 |
Maximum Out Of Pocket |
Self Coverage |
$4,000 |
Family Coverage |
$7,400 |
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| HEALTH SAVINGS ACCOUNT (HSA) |
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2010 Maximum Annual Contributions Limits |
Self Coverage |
$3,000 |
Family Coverage |
$6,150 |
2010 Minimum Deductible |
Self Coverage |
$1,200 |
Family Coverage |
$2,400 |
2010 Maximum Out of Pocket |
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Self Coverage |
$5,950 |
Family Coverage |
$11,900 |
Additional over age 55 |
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2010 and after |
$1,000 |
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| ADOPTION CREDIT |
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| Maximum credit for a child with special needs |
$13,170 |
Other adoptions qualified expenses |
Up to $13,170 |
Phase out range (modified adjusted gross income) |
$182,520 - $222,520 |
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| STUDENT LOAN INTEREST DEDUCTION |
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| Maximum Interest deduction |
$2,500 |
Modified Adjusted Gross Income phase out |
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Married filing jointly |
$120,000 - $150,000 |
| Single / Head of Household |
$60,000 - $75,000 |
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| TAX RATE SCHEDULES - SINGLE |
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| Taxable Income (USD) |
Tax (USD) |
Over (USD) |
But not over (USD) |
Tax (USD) |
+ % |
On amount over (USD) |
0 |
8,375 |
0 |
10 |
0 |
8,375 |
34,000 |
837.50 |
15 |
8,375 |
34,000 |
82,250 |
4,681.25 |
25 |
34,000 |
82,400 |
171,850 |
16,781.25 |
28 |
82,400 |
171,850 |
373,650 |
41,827.25 |
33 |
171,850 |
373,650 |
---------- |
108,421.25 |
35 |
373,65 |
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| TAX RATE SCHEDULES – HEAD OF HOUSEHOLD (HoH) |
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Taxable Income (USD) |
Tax (USD) |
Over |
But not over |
Tax (USD) |
+ % |
On amount over |
0 |
11,950 |
0 |
10 |
0 |
11,950 |
45,500 |
1,195.00 |
15 |
11,950 |
45,500 |
117,650 |
6,235.00 |
25 |
45,550 |
117,650 |
190,550 |
24,260.00 |
28 |
117,650 |
190,550 |
373,650 |
44,672.00 |
33 |
190,550 |
373,650 |
---------- |
105,095.00 |
35 |
373,650 |
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| TAX RATE SCHEDULES – MAIIRED FILING SEPARATE |
|
Taxable Income (USD) |
Tax (USD) |
Over |
But not over |
Tax (USD) |
+ % |
On amount over |
0 |
8,375 |
0 |
10 |
0 |
8,375 |
34,000 |
837.50 |
15 |
8,375 |
34,000 |
68,650 |
4,681.25 |
25 |
34,000 |
68,650 |
104,625 |
13,343.75 |
28 |
68,650 |
104,625 |
186,825 |
23,416.75 |
33 |
104,625 |
186,825 |
---------- |
50,542.75 |
35 |
186,825 |
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| TAX RATE SCHEDULES – MARRIED FILING JOINTLY OR QUALIFYING WIDOW(ER) |
|
Taxable Income (USD) |
Tax (USD) |
Over |
But not over |
Tax (USD) |
+ % |
On amount over |
0 |
16,750 |
0 |
10 |
0 |
16,750 |
68,000 |
1,675.00 |
15 |
16,750 |
68,000 |
137,300 |
9,362.500 |
25 |
68,000 |
137,300 |
209,250 |
26,687.50 |
28 |
137,300 |
209,250 |
373,650 |
46,833.50 |
33 |
209,250 |
373,650 |
---------- |
101,085.50 |
35 |
373,650 |
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| EARNED INCOME CREDIT (EIC) |
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Single, Head of Household, and Qualifying Widow(er) |
Earned income range to receive the maximum EIC (USD) |
Maximum EIC amount (USD) |
Maximum earnings before EIC eliminated (USD) |
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From |
To |
|
|
With no children |
5,970 |
7,500 |
457 |
13,450 |
With one child |
8,950 |
16,450 |
3,050 |
35,535 |
With two children |
12,550 |
16,450 |
5,036 |
40,363 |
| With three children |
12,550 |
16,450 |
5,666 |
43,350 |
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Married filing jointly |
Earned income range to receive the maximum EIC (USD) |
Maximum EIC amount (USD) |
Maximum earnings before EIC eliminated (USD) |
With no children |
5,950 |
12,500 |
457 |
18,470 |
With one child |
8,950 |
21,500 |
3,050 |
40,545 |
With two children |
12,550 |
21,500 |
5,036 |
45,373 |
| With three children |
12,550 |
21,500 |
5,666 |
48,362 |
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| EARNED INCOME CREDIT (EIC) IN A NUTSHELL |
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First, you must meet all the rules in this column |
Second, you must meet all the rules in one of these columns, whichever applies |
Third, you must meet the rule in this column |
Part A
Rules for everyone |
Part B
Rules if you have a qualifying child
|
Part C
Rules if you do not have a qualifying child |
Part D
Figuring and claiming the EIC |
1. Your adjusted gross income (AGI) must be less than
-- $43,350 ($48,362 for mar¬ried filing joint) if you have three qualifying children.
-- $40,363 ($45,373 for married filing joint) if you have two qualifying children.
-- $35,535 ($40,545 for married filing joint) if you have one qualifying child.
-- $13,450 ($18,470 for married filing jointly) if you do not have a qualifying child
2. You must have a valid social security number.
3. Your filing status cannot be “married filing separate.”
4. You must be a U.S. citizen or resident alien all year.
5. You cannot file Form 2555 or Form 2555-EZ (relating to foreign earned income).
6. Your investment income must be $3,100 or less.
7. You must have earned income. |
8. Your child must meet the relationship, age, and residency tests.
9. Your qualifying
child cannot be used
by more than one
person to claim the
EIC.
10. You cannot be a qualifying child of another person |
11. You must be at least 25 but under age 65.
12. You cannot be the dependent of another person.
13. You cannot be a qualifying child of another person.
14. You must have lived in the United States more than half of the year.
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15. Your earned income must be less than $43,350 ($48,362 for married filing joint) if you have three qualifying children.
- $40,363 ($45,373 for married filing joint) if you have two qualifying children.
- $35,535 ($40,545 if married filing joint) if you have one qualifying child.
- $13,450 ($18,470 for married filing joint) if you do not have a qualifying child. |
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| ALTERNATIVE MINIMUM TAX |
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First $175,000 ($87,500 married, separate) of Alternative Minimum Taxable Income |
26% |
Over $175,000 of Alternative Minimum Taxable Income |
28% |
Exemptions
| Married filing jointly or qualifying widower |
$72,450 |
Married filing separate |
$36,225 |
Single or Head of Household |
$47,450 |
Exemption Phaseout
| 25% of amount AMTI exceeds |
Filing Status |
AGI Begin Phaseout |
AGI Fully Phaseout |
MFJ / Surviving Spouse |
$150,000 |
$439,800 |
Married Filing Separate |
$75,000 |
$219,900 |
| Single / Head of Household |
$112,500 |
$302,300 |
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| WHERE TO DEDUCT YOUR INTEREST EXPENSE |
If you have |
THEN deduct it on |
AND for more information go to |
Deductible student loan interest |
Form 1040, line 33 or
Form 1040 line 18
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Publication 970 |
Deductible mortgage interest and
points reported on form 1098 |
Form 1040 (Schedule A, line 10) |
Publication 936 |
Deductible mortgage interest not
reported on form 1098 |
Form 1040 (Schedule A, line 11) |
Publication 936 |
Deductible point not reported on
form 1098 |
Form 1040 (Schedule A, line 12) |
Publication 936 |
Deductible investment interest
(other than interest incurred to
produce rents or royalties) |
Form 1040 (Schedule A, line 14) |
Publication 550 |
Deductible business interest (non-farm) |
Form 1040 (Schedule C or C-EZ) |
Publication 535 |
Deductible farm business interest |
Form 1040 (Schedule F) |
Publication 225 and 535 |
Deductible interest incurred to
produce rents or royalties |
Form 1040 (Schedule E) |
Publication 527 and 535 |
Personal interest |
Not deductible |
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| DOMESTIC PRODUCTION ACTIVITES DEDUCTION |
The deduction rate is 20%. Deduction reduced by 3% if the tax payer has any oil related qualified production activities income. |
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| KIDDIE TAX |
2010 Age limit |
18 |
2010 Unearned Income Limitation |
$1,900 |
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| FOREIGN EARNED INCOME |
2010 maximum exclusion |
$91,500 |
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| GIFT TAX |
2010 exclusion |
$13,000 |
2010 exclusion for gift to spouse who is not a U.S. citizen |
$134,000 |
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| 401K CONTRIBUTION LIMITS |
2010 maximum deferral |
$16,500 |
2010 catch up contribution for taxpayers 50 and over |
$22,000 |
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| LONG TERM CAPITAL GAINS AND QUALIFYING DIVIDENDS |
For tax payers in 10 to 15% bracket |
0% |
For taxpayers in higher brackets |
15% |
Tax on uncaptured Sec. 1250 gain |
25% |
Capital gain rate on collectibles |
28% |
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| SAVINGS BOND / HIGHER EDUCATION EXPENSE EXCLUSION |
Modified adjusted gross income phaseout |
Married filing joint |
$105,100 - $135,100 |
All other filing status |
$70,100 - $85,100 |
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| QUALIFYING TRANSPORATION FRINGE BENEFIT EXCLUSION |
Maximum premium per person |
Age 40 and under |
$330 |
Age 41 to 50 |
$620 |
Age 51 to 60 |
$1,230 |
Age 61 to 70 |
$3,290 |
Age 71 and over |
$4,110 |
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| LONG TERM CARE PREMIUMS |
Commuter highway vehicle transit pass |
$230 |
Qualified parking |
$230 |
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| SECTION 179 EXPENSE LIMIT |
Expense limit |
$500,000 |
Phase out Threshold |
$2,000,000 |
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| FICA (SOCIAL SECURITY AND MEDICARE) WAGE BASE |
|
Social Security Wage Base |
$106,800 |
Maximum Social Security Amount |
$6,621.60 |
Medicare Wage Base |
No ceiling |
| Maximum Medicare wage tax |
No ceiling |
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| MACRS RECOVERY PERIODS |
|
Type of property |
MACRS recovery period |
|
General Depreciation System |
Alternative Depreciation System |
Computers and their peripheral equipment |
5 years |
5 years |
Office machinery such as :
-- Typewriters
-- Calculators
-- Copiers |
5 years |
6 years |
Automobiles |
5 years |
5 years |
Light Trucks |
5 years |
5 years |
Appliances such as:
-- Stoves
-- Refrigerators |
5 years |
9 years |
Carpets |
5 years |
9 years |
Furniture used in rental property |
5 years |
9 years |
Office furniture and equipment such as:
-- Desks
-- Files |
7 years |
10 years |
Any property that does not have a class life and that has not been designated by law as being in any other class |
7 years |
12 years |
Roads |
15 years |
20 years |
Shrubbery |
15 years |
20 years |
Fences |
15 years |
20 years |
Residential rental property
Buildings and structures and structural components such as furnaces, water pipes, venting etc. |
27.5 years |
40 years |
Additions and improvements such as new roof |
The same recovery period as that of the property to which the addition or improvement is made, determined as if the property were placed in service at the same time as the addition or improvement. |
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| CORPORATE TAX RATE SCHEDULE |
|
Taxable Income (USD) |
Tax (USD) |
Over |
But not over |
Tax (USD) |
+ % |
On amount over |
0 |
50,000 |
0 |
15 |
0 |
50,000 |
75,000 |
7,500 |
25 |
50,000 |
75,000 |
100,000 |
13,750 |
34 |
75,000 |
100,000 |
335,000 |
22,250 |
39 |
100,000 |
335,000 |
10,000,000 |
113,900 |
34 |
335,000 |
10,000,000 |
15,000,000 |
3,400,000 |
35 |
10,000,000 |
15,000,000 |
18,333,333 |
5,150,000 |
38 |
15,000,000 |
18,333,333 |
NO LIMIT |
---------- |
35 |
0 |
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| ESTATE AND TRUST TAX RATES |
|
Taxable Income (USD) |
Tax (USD) |
Over |
But not over |
Tax (USD) |
+ % |
On amount over |
0 |
2,300 |
0 |
15 |
0 |
2,300 |
5,350 |
345.00 |
25 |
2,300 |
5,350 |
8,200 |
1,107.50 |
28 |
5,350 |
8,200 |
11,150 |
1,905.50 |
22 |
8,200 |
11,150 |
---------- |
2,879.00 |
35 |
11,150 |
|
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