|List By Date|
|Health Care and Entitlements|
Year End Gives Taxpayers Something To Celebrate, CCH Outlines Tax Law Changes That Will Take Effect
On January 1
(RIVERWOODS, ILL., December 20, 1999) - As average taxpayers ring in the new
century, they will benefit, in small ways, from a number of adjustments built into the
nations tax revenue laws, according to CCH INCORPORATED (CCH), a leading provider of
tax and business law information and software.
Standard Deductions in 2000, the standard deduction amounts rise
to: $7,350 (marrieds filing jointly and surviving spouse), $3,675 (marrieds filing
separately) $4,400 (single) and $6,450 (head of household). The standard deduction for
dependents claimed on anothers return remains at $700.
Exemptions Each personal exemption will be worth $2,800 on 2000
returns, up from $2,750 on 1999 returns.
Social Security Adjustments for Inflation The maximum amount of
wages subject to Social Security old age, survivors and disability withholding
increases from $72,600 to $76,200.
Social Security Income Limits The income a Social Security
recipient between age 65 and age 69 can earn before seeing a reduction in benefits rises
from $15,500 to $17,000. Those under age 65 can earn up to $10,080 before seeing a
reduction in their benefits.
Mileage Bobs Back Up The standard per-mile rate for business use
of an automobile will be back at 32.5 cents per mile, after a nine-month stint at 31 cents
per mile. Other rates remain unchanged medical use at 14 cents per mile and
charitable use at 10 cents per mile.
Deductible Student Loan Interest Up The amount of qualified
interest on student loans that can be deducted on 2000 returns will be $2,000, up from the
$1,500 maximum on 1999 returns.
IRA Phaseouts In 2000, the ability for those covered by a
qualified plan to make a deductible contribution to an IRA will begin to phase out at
$32,000 in adjusted gross income and end at $42,000 for single filers. For marrieds filing
jointly, the phaseout range is $52,000 to $62,000.
401(k) Contributions The maximum that can be contributed to a
401(k) plan in 2000 rises to $10,500 from $10,000 in 1999.
Expense Election The amount that can be "expensed"
rather than depreciated under Section 179 of the Internal Revenue Code rises to $20,000 in
Foreign Earned Income Exclusion The exclusion on foreign earned
income rises to $76,000 next year.
Estate Tax The unified credit equivalent for 2000 will be
More Expensive Safe Harbor Taxpayers with adjusted
gross incomes of $150,000 or more who make estimated tax payments for tax year 2000 will
have to fork over at least 108.6 percent of their 1999 taxes in order to have a safe
harbor from IRS penalties in the event that their estimated taxes are less than what
they actually owe for 2000. The safe harbor figure had been 106 percent for this group
prior to the passage of legislation extending expiring tax provisions. For taxpayers with
adjusted gross incomes less than $150,000, the safe harbor figure remains 100 percent of
prior years taxes.
State Tax Deadbeats May Lose Federal Refund The IRS will be
empowered to offset unpaid state income taxes against federal refunds, but only if the
debt to the state has been "reduced to judgement." Also, unlike a similar
program for collecting past-due child support, the debtor must still live in the same
state to which the money is owed.
A Kinder, Gentler, Saner IRS? Under provisions of the IRS
Restructuring and Reform Act, when the IRS seizes your IRA or 401(k) to pay a tax bill, it
will no longer impose an additional "early withdrawal" penalty on you. The
Service will also stop the practice of levying on a taxpayers wages even after it
admits that a tax debt is uncollectible, or when an installment agreement is pending or in
About CCH INCORPORATED
CCH INCORPORATED, headquartered in Riverwoods, Ill., was founded in 1913 and has served
four generations of business professionals and their clients. The company produces more
than 700 electronic and print products for the tax, legal, securities, human resources,
health care and small business markets. CCH is a wholly owned subsidiary of Wolters Kluwer
U.S. The CCH web site can be accessed at www.cch.com.
The CCH Federal and State Tax web site can be accessed at tax.cchgroup.com.
-- ### --