This is the first of a series of 2007 Tax reference sheets that I’ll be sharing with you over the next month or so. This one focuses on some of the major federal income tax key numbers. I’ll do future ones for estate planning, retirement planning and business planning in the not too distant future so stay tuned.
Since federal income taxes are such a large part of most peoples life or expenditures, I thought that you might like a summary or reference sheet for some of the important figures for 2007.
Many people believe that if someone is in the 28% tax bracket, they pay all taxes due at the rate of 28% of taxable income. This is not correct. A couple having a taxable income of $125,000 does not pay 25% federal income tax on ALL of the taxable income… but only on everything over $63,700. The first $15,650 is only taxed at 10%, the taxable income from $15,560-$63,700 would be taxed at 15% and so on. The figures below is taxable income (after deductions and exemptions).
I’ll start out with the tax brackets for the 2007 tax year.
The figures below show the various “steps” on how the
marginal income brackets are...
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