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Useful Income Tax and Retirement Planning Information
There have been several major tax law changes over the past few years with staggered effective dates. These laws have significantly changed the way you may want to consider your financial situation, especially retirement planning. Here is some information that you find helpful:
2017 Taxation of Dividends and Long Term Capital Gains
For taxpayers in the 10% and 15% brackets, qualifying dividends and long term capital gains (assets held for more than a year) will be taxed at 0%. For those in 25%, 28%, 33% and 35% tax brackets, the tax rate on dividends and long term capital gains is 15%. For those in the top 39.6% bracket, the tax rate is 20%.
2017 Medicare Surtaxes
As part of the health care reform enacted in 2010, additional Medicare surtaxes began in 2013 for high income wage earners and high income investors. The surtaxes apply when a single taxpayer's Modified Adjusted Gross Income (MAGI) exceeds a threshold of $200,000 or joint return filers when their MAGI exceed $250,000.
Regular IRA and Roth IRA Contribution Limits
401(k) Retirement Plan Contribution Limits
Coverdell Education Savings Accounts (Education IRAs)
For 2017, the annual contribution limit is $2000 with eligibility phase out beginning at $190,000 (for married filing jointly) and $95,000 of Adjusted Gross Income (some modifications apply).
Annual Gift Tax Exclusion
For 2017, gifts of $14,000 and under are not subject to gift tax.
2017 Payroll Taxes - Social Security and Medicare
2017 Social Security Benefits
2017 Average monthly benefit for all retired workers - $1,360.
2017 Average monthly benefit for retired couples - $2,260.
2017 Maximum monthly benefit for a worker at full retirement age - $2,687.