Tax News - Income Tax Rates Adjusted to Inflation
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Here’s our latest installment of news for the tax preparer. Keep yourself in the know so you can best serve those who you have been providing this invaluable service. You as a Professional Tax Preparer must always be on your toes to stay up-to-date. Universal Accounting strives to give you the sources you need to be as best prepared as possible.
Income Tax Rates Adjusted to Inflation
The income tax rates for 2006 remained unchanged , along with 2005. However the IRS has announced it has adjusted income tax brackets for inflation.
The IRS publishes the next year’s tax rates each year in the last fall. So 2007 tax brackets, as well as amounts for standard deductions, personal exemptions and other tax areas, are already published. You’ll find more about this by clicking here.
Standard Deductions
Standard deductions were also adjusted for inflation, the basic deduction all tax payers receive. Remember when you total all the deductions that are being taken and they are less than the standard deduction, by all means advise to do the Standard Deduction.
Here are the standard deductions for 2006 and 2007.
| Filling status | Amount |
|---|---|
| Married filling jointly or qualifying widow(er) | $10,300 |
| Heads of households | $7,550 |
| Singles | $5,150 |
| Married filling separately | $5,150 |
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- If you’re 65 or blind: An additional $1,000 standard deduction may be claimed by a married taxpayer who is at least 65 years old or blind. If the taxpayer is single, the additional standard deduction amount is $1,250.
- If you’re 65 AND blind: A married taxpayer can claim a second $1,000 standard deduction — for a total of $2,000. If the taxpayer is single, he can claim a second $1,250 standard deduction — for a total of $2,500.
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| Filling status | Amount |
|---|---|
| Married filling jointly or qualifying widow(er) | $10,700 |
| Heads of households | $7,850 |
| Singles | $5,350 |
| Married filling separately | $5,350 |
There are several helps for keeping current found on the Internal Revenue Service web site. Search them out and get those pages bookmarked on your web browser for easy access and referencing. Staying on top of your game is a constant battle and you ahve to dedicate yourself to being the best for your customers.
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