CHARITABLE CONTRIBUTIONS

TAX TOOLS

The following are recent tax laws, tools, and information that we hope you will find useful. If you have any further questions regarding this helpful tax information, please do not hesitate to contact our office.

2003 U.S. Tax Act

Charitable Contributions

2003 Tax Chart

2003 US TAX ACT

The newly enacted 2003 Tax Act will impact upon your taxes in several ways. All taxpayers will benefit from the lowered tax rates and many of us will benefit from the increases in the Child Tax Credit.

1. A comparison showing the savings from the old tax rates versus the new tax rates for taxable income ranges from $5,000 to $5,000,000;

2. The increase in the Child Tax Credit for those with one qualifying child (under the age of 17 as of 12/31/03); and

3. The increase in the Child Tax Credit for those with two qualifying children (under the age of 17 as of 12/31/03).

In addition to the savings reflected on the tables, you may benefit from reduced tax rates for dividend income and long-term capital gains.

Finally, you will find a Tax Chart which shows a variety of changes made due to the 2003 Tax Act.

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CHARITABLE CONTRIBUTIONS

Did you make any cash or noncash charitable contributions in 2005? If so, the following information outlines general record keeping requirements for charitable contributions. Please see the charitable contributions document for general record keeping requirements. Please do not hesitate to contact out office to see how we can aid you in preparing efficient and appropriate tax return, with these contributions present.

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2003 TAX CHART

2003 CHANGES IN TAX RATES, PAYROLL TAX RATES, EXEMPTIONS

AND OTHER ITEMS DUE TO 2003 TAX ACT

2003-OLD 2003-NEW

1. Personal Exemptions $3,050 $3,050

2. Standard Deduction

• Single 4,750 4,750

• Head of Household 7,000 7,000

• Married 7,950 9,500

• Dependents 750 750

3. Tax Rates

Single

• 10% Bracket 0 - 6,000 0 - 7,000

• 15% Bracket 6,000 - 28,400 7,000 - 28,400

• 27% / 25% Bracket 28,400 - 68,800 28,400 - 68,800

• 30% / 28% Bracket 68,800 - 143,500 68,800 - 143,500

• 35% / 33% Bracket 143,500 - 311,950 143,500 - 311,950

• 38.6% / 35% Bracket above 311,950 above 311,950

Married

• 10% Bracket 0 - 12,000 0 - 14,000

• 15% Bracket 12,000 - 47,450 14,000 - 56,800

• 27% / 25% Bracket 47,450 - 114,650 56,800 - 114,650

• 30% / 28% Bracket 114,650 - 174,700 114,650 - 174,700

• 35% / 33% Bracket 174,700 - 311,950 174,700 - 311,950

• 38.6% / 35% Bracket above 311,950 above 311,950

4. Phaseout Range for Exemptions 209,250 - 331,750 209,250 - 331,750

(Married Filing Joint)

5. 3% Phaseout of Itemized

Deductions commences at: 139,500 139,500

6. Standard Mileage Rate 36¢ 36¢

7. 401(k) Employee Contribution Limit 12,000 12,000

8. Annual Gift for Tax Exclusion 11,000 11,000

9. NJ Unemployment Tax Wage Base 23,900 23,900

10. Section 179 Limit 25,000 100,000

11. 1^st Year Luxury Auto (Depreciation limit) 4,600 7,650

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