Untitled Document

			Year 2006	Year 2007

1. First Bracket			10%	10%

2. Second Bracket: Begins at:			15%	15%
	Joint		14,600	15,100
	Single		7,300	7,550

	Head of household		10,450	10,750
	Married filing separately		7,300	7,550
	Estates and trusts		0	0

3. Third Bracket: Begins at:			25%	25%
	Joint		$59,400	$61,300
	Single		29,700	30,650
	Head of household		39,800	41,050
	Married filing separately		29,700	30,650
	Estates and trusts		2,000	2,050

4. Fourth Bracket: Begins at			28%	28%
	Joint		$119,950	$123,700
	Single		71,950	74,200
	Head of household		102,800	106,000
	Married filing separately		59,975	61,850
	Estates and trusts		4,700	4,850

5. Fifth Bracket: Begins at:			33%	33%
	Joint		$182,800	$188,450
	Single		150,150	154,800
	Head of household		166,450	171,650
	Married filing separately		91,400	94,225
	Estates and trusts		7,150	7,400

6.Sixth Bracket: Begins at			35%		35%

	Joint		$326,450		$336,550
	Single		326,450		336,550
	Head of household		326,450		336,550
	Married filing separately		163,225		168,275
	Estates and trusts	9,750			10,050



		Year 2005			Year 2006

1. Health insurance premiums of Self Employed-Deductible:		100%			100%
2. Section 179 Expense Election:
	Maximum deduction limited to taxable income from trade or business:	$105,000			$108,000

	Reduction if cost of Section 179 property exceeds :	$420,000			$430,000

	(a) $35,000 is added to above figures for qualifying property used in the New York City Liberty Zone purchased and placed in servise after September 10, 2001.
3. Standard Milege rates:
	Business travel		40.5/48.5cents		44.5cents
	Medical/moving		15cents		18cents
	Charitable use		14cents		14cents

4. Standard deduction:
	Joint return	$10,000			$10,300
	Head of household	$7,300			$7,550
	Single	$5,000			$5,150


(a)Dependent-Greater of $850 or earned income plus $300 of unearned income, up to single maximum of:		$5,000			$5,150

(b)Aged 65 or older, or legally blind:
	Add-Single	$1,250			$1,250
	-if married filling joint	1,000			1,000
5. Personal exemptions:		$ 3,200			$ 3,300

6. Cap on Social Security Wage Base 6.2% of wage based for FICA; 1.45% of total salary for Medicare			$ 90,000	$ 94,200



7. Phase-out of itemized deductions (other than medical, investment interest and casualty, theft and wagering loss) 3% of AGI in excess of:			$145,950	$150,500
			Year 2005	Year2006

8. Personal Exemption Phaseout-AGI beginning at
:	Joint	$218,950			$225,750
	Head of household	$182,450			$188,150
	Single	$145,950			$150,500
(a) Reduced by 2% for each $2,500 or fraction
thereof by which AGI exceeds above amounts

Fully Phase Out-AGI above:
	Joint	304,950			310,650
	Head of household	$341,450			$341,450
	Single	268,450			273,000
9. Gift Tax Exemption		$ 11,000			$ 12,000

10. Transportation Fringe Benefits:
(a) Employer provided transit passes-Employee can exclude per month from gross income			$ 105	$ 105


(b) Employer provided parking-on or near premises of Employer, or near a location from which the employee commutes to work by mass transit			$ 200	$ 205

11. Childs Tax Credit for a dependent:
Less: Than 17 years old at close of tax year Reduced by $50 for each $1,000 or fraction thereof AGI above $110,000 joint, or $75,000 single			$ 1,000	$ 1,000

		$ 11,000			$ 11,300
Credit is refundable to extend of 15% taxpayer's earned income over


(Nontaxable combat pay can be treated as earned
income)

A refundable credit is also available for low-income
Families with 3 or more children where social security
Taxes exceed the earned income credit.

12.U.S citizens working in a foreign country can exclude foreign earned income up to:			$ 80,000	$ 80,000

13.Higher education expense deduction for AGI:
Individuals with AGI up to $65,000, and joint filers
with AGI up to $130,000 can deduct for AGI up to $___ $ 4,000 Does not
apply to years Individuals with AGI above $65,000 but under $80,000 beginning
and joint filers with AGI above $130,000 but under after
$160,000 up to $_____ $ 2,000 12/31/05

The deduction cannot be taken for any individual for whom
the Hope or Lifetime Learning Cretids are claimed.
(a) The Hope Credit can be claimed for the first two years
Of undergraduate education when enrolled on at list a half-
time basis in a program leading to a degree or certificate. The
credit is available for each eligible student.
(i) Credit is 100% of the first $1,000 of college tuition expenses
and 50% of the second $1,000 for a maximum of $1,500.

(ii) Credit available for tuition paid in one year for an academic
period that begins no later than January, February or March
of the following year.

(iii) At the following of the tax year the student must not have
completed the first 2 years of postsecondary education. In
addition the student must not have been convicted of any
felony class drug affense.
(b) The Lifetime Learning Credit is available per taxpayer
for any year of undergraduate and graduate enrollment and
even for one course of study.
(i) Credit is 20% of college tuition expenses up to $____ $ 10,000 $ 10,000

(c) Both have a phase-out Range-Joint AGI $ 87,000 $ 90,000
to to
$107,000 $110,000

-Single AGI $ 43,000 $ 45,000 to to
$ 53,000 $ 55,000


Year 2005 Year 2006

14.Interest on education loans-maximum $ 2,500 $ 2,500
Reduced when AGI exceeds: $ 50,000 $ 50,000
($100,000 joint) ($105,000 joint)

Eliminated when AGI is: $ 65,000 $ 65,000
($135,000 joint) ($135,000 joint)

15.Coverdell Education Savings Account:(CESA)

(a) Maximum annual contribution is: $ 2,000 $ 2,000
For a designated beneficiary under age 18; must distribute
account after age 30. Earnings are tax free if used for public,
private, and religious elementary, secondary school, and
college! No deduction for contributions.

(b) Phaseout
-AGI Between $ 95,000- $ 95,000-
$110,000-single $110,000-single

-AGI Between $190,000- $190,000-
$220,000-joint $220,000-joint
(c) Can set up a 529 plan for same beneficiary in same tax year.

16.Deducting state and local sales taxes in lieu of deduction for
state local income taxes Available No longer Available


17.Avoidance of penalties for Underestimation of Estimated Tax paid

(a) No penalty if tax liability for year, after credit for tax
withheld is less than $1,000.

(b) No penalty if tax liability for prior year is zero.

(c) No penalty if estimated and withheld taxes paid is at least
90% of currents year's tax or 100% of prior year , unless the
prior year's AGI in excess of $150,000 - in which case:
(i) if prior year is 2005 prior year's safe harbor percentage
is 110%.





Year 2005 Year2006

18.Dependent Care Credit - A taxpayer who maintains a house hold
for one or more qualifying individuals, (depedent under age 13,
or one physically or mentally incapable of caring for himself), and
who pays child or dependent care expenses to enable him to be
gainfully employed;(use Form 2441).
Taxpayers with AGI of $15,000 or less, credit is 35% 35%

When AGI over $43,000 credit is reduced to 20% 20%

Maximum for credit -one qualified individual $ 3,000 $ 3,000
-two or more $ 6,000 $ 6,000

-Credit not available for costs paid to a dependent of taxpayer,
or to taxpayer's child under age 19. However, payments to
relatives (i.e., parents), who are not dependents, will qualify.
-Credit limited on joint return to earned income of lower earning
spouse unless spouse is a full-time student (5 calendar months)
in which case earned income is assumed to be $250 per month
if one qualifying individual, and $500 per month if two or more.

19. Conributions to Traditional IRAs - Individuals, must be under
age 70.5, and have earned income (other than deferred
compensation). Contributions can be made up to due date
of the tax return.

-Maximum contribution $ 4,000 $ 4,000
- If taxpayer age 50 or over $ 4,500 $ 5,500
Phase-out for joint filers if taxpayer covered by an AGI between AGI between
employer's retirement plan. $ 70,000 and $ 75,000 and
$ 80,000 $ 85,000

Individual who is not an active participant in an employer's AGI between AGI between
retirement plan, but whose spouse is - phase out if: $150,000 and $150,000 and
$160,000 $160,000
Designated beneficiary is determined as of September 30
of year following year of owner's death.

20.Conributions to Roth IRAs -individuals can be over age 70.5
-Maximum contribution (to all IRAs)- $ 4,000 $ 4,000
-if taxpayer age 50 or over (to all IRAs)- $ 4,500 $ 5,000
Above maximum do not include rollover contributions
From a traditional IRA to a Roth IRA


Year 2005 Year 2006

Contructions phase out for single tax AGI between {$95,000-$110,000} {$95,000-$110,000}

Joint filers with AGI between {$150,000-$160,000} {$150,000-$160,000}

Married filing separately with AGI between $ -0- $ -0-
$ 10,000 $ 10,000
(i) For above phase out AGI does not include income
reperted from the conversation of a traditional IRA
into a Roth IRA.
(ii) To convert from traditional IRA into a Roth IRA the
taxpayer's AGI may not exceed $100,000 and the
taxpayer if married, may not file separately. Although
the converted amount must be included in gross income
it is not counted in determining the $100,000 AGI limit.
(iii) Unlike traditional IRAs, the contribution limits apply
whether or not taxpayer is an active participant in an
employer maintained retirement plan.
Qualified distribution of Roth IRAs are not subjected to
any tax. A qualified distribution is:
(a) One made after a 5 year holding period, beginning
with the first year for which the taxpayer made a
contribution to a Roth IRA, and,
(b) Made after attaining age 59.5, or at or after death to
a beneficiary, or for a first time home purchase.

22. Passive Losses from Rental of Real Estate
Up to $25,000 may be deducted in full against no passive income, if taxpayer or taxpayer's spouse, actively participates (i.e., makes management decisions) in the rental real estate activity, and has at least 10% interest in real estate activity. The $25,000 maximum is deducted by 50% of the amount by which taxpayer's AGI for the year exceeds $100,000 and is completely phase out when AGI reaches $150,000. AGI is calculated without regard to IRA contributions and taxable social security benefits.			$ 25,000	$ 25,000
23. Teacher's Classroom Expenses
			$ 250	$ 250
Up to $250 per year for teacher's classroom expenses ca be claimed for AGI for un-reimbursed expenses incurred
to purchase books, supplies, etc. used in classroom.