Tax Facts Quick Reference 2012

Transcription

1 Wealth Management Services Tax Facts Quick Reference 2012 Income Investment Estate Retirement Social Security FOR USE BY FINANCIAL ADVISORS AND CLIENTS IN CONSULTATION WITH THEIR FINANCIAL ADVISOR FOR EDUCATIONAL AND INFORMATIONAL PURPOSES ONLY. NUVEEN INVESTMENTS IS NOT A TAX ADVISOR.

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4 INCOME ORDINARY INCOME TAX BRACKETS AND AMOUNTS Tax Rate Married, Filing Jointly Head of Household 10% $0 - $17,400 $0 - $12,400 15% $17,401 - $70,700 $12,401 - $47,350 25% $70,701 - $142,700 $47,351 - $122,300 28% $142,701 - $217,450 $122,301 - $198,050 33% $217,451 - $388,350 $198,051- $388,350 35% $388,351 + $388,351 + Tax Rate Single Married, Filing Separately 10% $0 - $8,700 $0 - $8,700 15% $8,701 - $35,350 $8,701 - $35,350 25% $35,351 - $85,650 $35,351 - $71,350 28% $85,651- $178,650 $71,351 - $108,725 33% $178,651 - $388,350 $108,726 - $194,175 35% $388,351 + $194,175 + Source: IRS Revenue Procedure STANDARD DEDUCTION There is no phase-out of allowable itemized deductions for Filing Status Married, Filing Jointly $11,900 Single $5,950 Married, Filing Separately $5,950 Head of Household $8,700 Source: IRS Revenue Procedure PERSONAL EXEMPTIONS There is no phase-out of the personal exemption amount for Filing Status Personal Exemption $3,800 Source: IRS Revenue Procedure ALTERNATIVE MINIMUM TAX RATES AMT Married Individuals Tax Rate Filing a Separate Return All others 26% $0 - $87,500 $0 - $175,000 28% $87,501+ $175,001+ Source: Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010: Law, Explanation & Analysis, 375, Alternative Minimum Tax Exemption Amount ALTERNATIVE MINIMUM TAX EXEMPTION 2011 AMT 2012** Filing Status Exemption Phaseout Range Exemption Married, Filing Jointly $74,450 $150,000 - $447,800 $45,000 Married, Filing Separately $37,225 $75,000 - $223,900 $22,500 Unmarried* $48,450 $112,500 - $306,300 $33,750 * This includes single and head of household. ** As of 1/1/2012, without congressional action, exemption reverts back to these pre levels. Source: Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010: Law, Explanation & Analysis, 375, Alternative Minimum Tax Exemption Amount For Use by Financial Advisors and Clients in Consultation with their Financial Advisor

5 INVESTMENT CAPITAL GAINS AND QUALIFIED DIVIDENDS Long Term Dividend Capital Gains Income Rate for taxpayers above 15% income tax bracket 15% 15% Rate for taxpayers in 10% or 15% income tax bracket 0% 0% Source: CCH Tax Briefing: Tax Relief/Job Creation Act of Maximum Long Term Capital Gain Rate Collectibles Gain 28% Gain on qualified small business stock equal to the section 1202 exclusion 28% Un-recaptured section 1250 gain 25% Source: Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010: Law, Explanation & Analysis, 405, Maximum Capital Gains Rates DEDUCTION LIMITS FOR CHARITABLE GIFTS Percentage Limitation Public Private Cash 50% 30% Ordinary Income Property 50% 30% Capital Gain Property 30% 20% Source: Internal Revenue Service, Charitable Contribution Deductions (Publication 78 Help, Part II) 8/24/11; Publication 526: Charitable Contributions ESTATE INCOME TAX RATES FOR BENEFICIARIES OF ESTATES AND TRUSTS Tax Rate 15% $0 - $2,400 25% $2,401 - $5,600 28% $5,601 - $8,500 33% $8,501 - $11,650 35% $11,651+ Source: IRS Revenue Procedure GENERATION-SKIPPING TRANSFER (GST) TAX ESTATE AND GIFT TAX GST Tax Rate 35% GST Tax Exemption $5.12 million Source: Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010: Law, Explanation & Analysis, 705, Sunset Extended; Transfer Taxes Reinstated; Federal Estate and Gift Tax Reporter, , Unified Credit: Unified Credit in General Estate Tax Exclusion $5.12 million + DSUEA* Top Marginal Estate Tax Rate 35% Annual Gift Tax Exclusion $13,000 * Basic exclusion amount plus Deceased Spouse s Unused Exclusion Amount. Source: Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010: Law, Explanation & Analysis, 705, Sunset Extended; Transfer Taxes Reinstated IRS Revenue Procedure for educational and informational purposes only. Nuveen is not a tax advisor.

6 RETIREMENT INDIVIDUAL RETIREMENT ACCOUNTS (IRAs) Contribution Limits Traditional/Roth IRA* Maximum contribution $5,000 Catch-up Provision for Individuals 50 and up $1,000 * Total combined contributions to Traditional and Roth cannot exceed these amounts. Source: 2012 IRA Contribution and Deduction Limits, 10/20/11, Modified AGI Phase Out Range for contributions for Individuals Covered by a Retirement Plan Traditional IRA Roth IRA Married, Filing Jointly $92,000 - $112,000 $173,000 - $183,000 Married, Filing Separately $0 - $10,000 $0 - $10,000 Married, Filing Jointly when only one spouse is covered by a qualified plan $173,000 - $183,000 NA Single $58,000 - $68,000 $110,000 - $125,0000 Head of Household $58,000 - $68,000 $110,000 - $125,0000 Source: 2012 IRA Contributions and Deduction Limits Effect of Modified AGI on Deductible Contributions if you ARE Covered by a Retirement Plan at Work, Effect of Modified AGI on Deductible Contributions if you are NOT Covered by a Retirement Plan at Work, Effect of Modified AGI on Roth IRA Contributions, 10/20/11 OTHER QUALIFIED PLANS Contribution Limits Limit on annual additions to defined contribution plans $50,000 Maximum elective deferral to retirement plans, i.e. 401(k) plans, 403(b) plans, and 457(b) plans $17,000 Catch-up contribution limit (for Individuals 50 and over) $5,500 Maximum annual compensation taken into account for contributions $250,000 Maximum individual elective deferral to SIMPLE 401(k) plans $11,500 Catch-up Contribution limit for SIMPLE plans (for Individuals 50 and Over) $2,500 Annual benefit limit under defined benefit plans $200,000 Source: IRS Announces Pension Plan Limitations for 2012, IR , 10/ 20/11 ELIGIBLE LONG-TERM CARE PREMIUMS Long-term care premiums are includible as medical care expenses under Schedule A, Itemized Deductions, with the following limitations: Attained Age Before the Close of the Taxable Year Limitation on Premiums 40 or less $350 More than 40 but not more than 50 $660 More than 50 but not more than 60 $1,310 More than 60 but not more than 70 $3,500 More than 70 $4,370 Source: IRS Revenue Procedure , For Use by Financial Advisors and Clients in Consultation with their Financial Advisor

7 SOCIAL SECURITY SOCIAL SECURITY BENEFITS Maximum earnings subject to Social Security Tax (FICA) $110,100 Employee s share of Social Security Tax 4.2%* Retirement earnings test exempt amount for individuals $14,640/year below Full Retirement Age (FRA). $1 in benefits withheld for $1,220/month every $2 in earnings over this limit Retirement earning test exempt amount for individuals $38,880/year attaining FRA in 2012 (applies only to earnings made in $3,240/month months prior to attaining FRA). $1 in benefits withheld for every $3 in earnings above this limit. * As of 1/1/2012, without congressional action, rate reverts to 6.2% after 2/29/12. Source: Social Security Changes; 2011 Tax Legislation: Law Explanation & Analysis, 101, Payroll Tax Cut Extension TAX ON SOCIAL SECURITY Combined Income Combined Income Amount of Social Security (joint)* (single)* subject to tax $32,000 -$44,000 $25,000 - $34,000 50% $44,001+ $34, % * Combined income is the sum of adjusted gross income, plus nontaxable interest, plus one-half of Social Security benefits. Source: Social Security Retirement Benefits, September This report is provided by Nuveen Investments Wealth Management Services for informational and educational purposes only. Although this report contains general tax information, it should not replace a client s consultation with a professional advisor regarding their tax situation. Nuveen is not a tax advisor. Clients should consult their professional advisors before making any tax or investment decisions. This report contains no investment recommendations and should not be construed as specific tax, legal, financial planning or investment advice. Information was obtained from third party sources, which we believe to be reliable but not guaranteed. Neither Nuveen Investments nor any of its affiliates, directors, employees or agents accepts any liability for any loss or damage arising out of the use of all or any part of this paper Nuveen Investments, Inc. for educational and informational purposes only. Nuveen is not a tax advisor.

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