IRA Contributions: For 2007, the maximum
contribution is $4,000 for both traditional and Roth Individual
Retirement Accounts ("IRAs"). A "catch-up" provision of $1,000 is
available for those age 50 and over. If you'd like to put more aside,
then next year (2008) will offer some relief because the base
contribution will increase to $5,000.
SEP IRA Provisions: The
maximum compensation limit for tax year 2007 increases from $220,000 to
$225,000. This increase generates a maximum SEP contribution of
$45,000, up from $44,000 in 2006.
SIMPLE IRA Plans: For
2007, Elective Contributions are raised to $10,500. For participants
age 50 and over, there is an additional "catch-up" provision of $2,500. The non-elective employer contribution wage base is $220,000.
401(k) Contribution Limits: Elective
employee contributions for 2007 have risen from $15,000 to $15,500.
Check with your employer as there may be additional limitations under
your specific plan. The "catch-up" provision for participants age 50 and over remains at $5,000.
Social Security Wage Base: The Social Security Wage Base for 2007 is $97,500.
Maximum Social Security Benefits: The new social security maximum benefit is $2,116 per month, and the Cost of Living Adjustment (COLA) is 3.3%.
Annual Federal Gift-Tax Exclusion: The
annual gift-tax exclusion remains at $12,000. In subsequent years, the
annual gift-tax exclusion can be indexed for inflation, but only in
$1,000 increments.
Federal Estate-Tax Exclusion: The $2,000,000 estate-tax exclusion that began in 2006 remains the same for both 2007 and 2008.
Charitable Deductions: Beginning
January 1, 2007, you will need receipts for all charitable gifts
regardless of size. Previously, you only needed documentation on gifts
of $250 and over.
Tax-Bracket Creep: For
a married couple filing jointly, the 25% tax bracket rises from $61,300
to $63,700. For those in the 28% tax bracket, the increase is from
$123,700 to $128,500.
Glenn ("Chip") Dahlke, a senior contributor to the Living Trust Network, has 29 years in the investment business. He
is a Registered Representative of Linsco/Private Ledger and a principal
with Dahlke Financial Group. He is licensed to transact securities with
persons who are residents of the following states: CA. CT, FL, GA, IL.
MA, MD. ME, MI. NC, NH, NJ, NY.OR, PA, RI, VA, VT, WY. If you have any questions or comments, Chip would love to hear from you. You may contact him at dahlkefinancial@sbcglobal.net. You may also contact him at the Living Trust Network. Its web site is http://www.livingtrustnetwork.com Copyright 2007. Living Trust Network, LLC. All Rights Reserved
|
