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Contact Information

Leslie Bonacum
847-267-7153
mediahelp@cch.com
Neil Allen
847-267-2179
neil.allen@wolterskluwer.com

Less To The IRS Next Year. CCH Releases Tax Bracket Changes For 1999

(RIVERWOODS, ILL., September 23, 1998) -- Inflation, even at a low rate, can still lessen Americans’ tax bills, according to CCH INCORPORATED, which today released estimated income ranges for each 1999 tax bracket. The projections, developed by CCH, a leading provider of tax law information, indicate single and married taxpayers will pay less to the Internal Revenue Service (IRS) to make up for the impact of inflation. Since average incomes have been rising faster than the cost of living, many people will end up even further ahead when their 1999 taxes are due on April 17, 2000, or may realize that savings in their 1999 withholding and estimated taxes.

Based on the projections, some typical examples of the small windfall for the 1999 tax year, according to CCH, include:

  • A married couple filing jointly with total taxable income of $50,000 could pay $91 less in income taxes in 1999.
  • A single filer with taxable income of $50,000 will contribute $52 less next year.

Adjusted for inflation, it looks like the standard deduction and personal exemption amounts will increase as well for 1999.

  • Married couples filing jointly will see a projected $100 increase in their standard deduction to $7,200.
  • Single taxpayers could see a $50 increase over 1998 in their standard deduction to $4,300.
  • The personal exemption amount will most likely go up in 1999, by $50, to $2,750.

The increase in the standard deduction from 1998 to 1999 is only half of the increase between 1997 and 1998. Most other 1999 inflation-adjusted tax figures show a similar trend, not only because inflation has cooled, but also because of some bad breaks in how the required "rounding-down" inflation computational conventions worked out this year, CCH noted.

Nevertheless, inflation adjustments do add up over the years. For example, the standard deduction has grown through inflation from $5,000 in 1988 for married taxpayers filing joint returns, to the anticipated $7,200 amount for 1999. For a complete look at how income ranges for each tax bracket are projected to shift next year, see the attached CCH chart.

INFLATION ADJUSTMENTS

For more than a decade, the U.S. tax code has required that federal income tax brackets and certain other figures be adjusted for inflation annually. The adjustment is based on Consumer Price Index figures for September through August immediately prior to the adjusted year. CCH’s projections are based on the relevant inflation data released September 17, 1998 by the U.S. Department of Labor.

Annual inflation adjustments have been inserted into the Internal Revenue Code in recent years with increasing frequency. Aside from the 40 separate computations needed to inflation-adjust the tax bracket tables each year, the Code now requires over 50 other inflation-driven computations to determine deduction, exemption and exclusion amounts.

The IRS usually releases official numbers in December each year. CCH tax bracket projections are provided for illustrative purposes only, and should not be used for income tax returns or other federal income tax related purposes until confirmed by the IRS later this year.

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 annually 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 US.

CCH INCORPORATED’s 1998 TAX PROJECTIONS*

Married Filing Jointly
(& Surviving Spouse)

1999 Taxable Income Tax Rate 1998 Taxable Income
$0-$43,050 15% $0-$42,350
$43,050-$104,050 28% $42,350-$102,300
$104,050-$158,550 31% $102,300-$155,950
$158,550-$283,150 36% $155,950-$278,450
over $283,150 39.6% over $278,450

Married Filing Separately

1999 Taxable Income Tax Rate 1998 Taxable Income
$0-$21,525 15% $0-$21,175
$21,525-$52,025 28% $21,175-$51,150
$52,025-$79,275 31% $51,150-$77,975
$79,275-$141,575 36% $77,975-$139,225
over $141,575 39.6% over $139,225

Single Filers

1999 Taxable Income Tax Rate 1998 Taxable Income
$0-$25,750 15% $0-$25,350
$25,750-$62,450 28% $25,350-$61,400
$62,450-$130,250 31% $61,400-$128,100
$130,250-$283,150 36% $128,100-$278,450
over $283,150 39.6% over $278,450

Head of Household

1999 Taxable Income Tax Rate 1998 Taxable Income
$0-$34,550 15% $0-$33,950
$34,550-$89,150 28% $33,950-$87,700
$89,150-$144,400 31% $87,700-$142,000
$144,400-$283,150 36% $142,000-$278,450
over $283,150 39.6% over $278,450

Standard Deduction Amounts

Filing Status 1999 1998 Increase
Married Filing Jointly (& Surviving Spouse) $7,200 $7,100 $100
Married Filing Separately $3,600 $3,550 $50
Single $4,300 $4,250 $50
Head of Household $6,350 $6,250 $100

Standard Deduction for Dependents
("Kiddie" Standard Deduction)

1999 1998 Increase
$700 $700 $0

Income Level At Which 3 Percent Itemized
Deduction Limitation Takes Effect
(Adjusted Gross Income)

Filing Status 1999 1998 Increase
Married Filing Jointly (& Surviving Spouse) $126,600 $124,500 $2,100
Married Filing Separately $ 63,300 $62,250 $1,050
Single $126,600 $124,500 $2,100
Head of Household $126,600 $124,500 $2,100

Personal Exemption Amounts

1999 1998 Increase
$2,750 $2,700 $50

Threshold for Personal Exemption Phaseout

Filing Status 1999 1998 Increase
Married Filing Jointly (& Surviving Spouse) $189,950 $186,800 $3,150
Married Filing Separately $ 94,975 $93,400 $1,575
Single $126,600 $124,500 $2,100
Head of Household $158,300 $155,650 $2,650

Gift Tax Exemption

1999 1998 Increase
$10,000 $10,000 $0

 

CCH Note: The Taxpayer Relief Act of 1997 calls for an annual inflation computation of the $10,000 annual gift tax exclusion, but allows increases only if the computation raises the exclusion by multiples of $1,000. Since this year the inflation computation would raise the exclusion to $10,169, the rounding-convention brings the gift tax exclusion right back down to $10,000. At the current rate of inflation, the gift tax exclusion won’t be bumped up to $11,000 until the year 2004.

(*These numbers are projected for the 1999 tax year and have not been confirmed by the Internal Revenue Service.)

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nb-98-74

       


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