Planning Input[Name]2005 Year-End Tax Planning: Planning Input[Date]

You do not need to enter anything into shaded cells.CONFIDENTIALFiling Status and Exemptions20042005Filing statusMarried Filing SeparatelyMarried Filing SeparatelyIf married filing separately, live with spouse at any time during year?NoYesTaxpayer's age at end of year3738Spouse's age at end of year3637Taxpayer, spouse, or both blind?NoNoNumber of dependents11Number of dependents eligible for child tax credit11

IncomeWages, salaries, tips, etc.$42,000$42,000Tax-exempt interest$0Taxable interest and ordinary dividends2525Qualified dividends$0Taxable state refunds0Business income (or loss)57,00057,000Capital gain (or loss)(3,000)(3,000)Other gains (or losses)0Taxable IRA and pension distributions0Rental real estate, royalties, partnerships, S corporations, etc.(2,016)(2,016)Unemployment compensation0Social Security benefits: Total$0Social Security benefits: Taxable00Other income0Total income$94,009$94,009

Adjustments to IncomeTaxpayer's traditional IRA contribution$0Taxpayer covered by retirement plan?NoNoSpouse's traditional IRA contribution$0Spouse covered by retirement plan?NoNoIRA deduction$0$0Tuition and fees paid$4,000$4,000Tuition and fees deduction00Health savings account deduction3,0003,000Moving expenses0One-half of self-employment tax4,0904,090Self-employed health insurance deduction0Self-employed SEP, SIMPLE, and qualified plans0Other adjustments0Total adjustments7,0907,090Adjusted gross income$86,919$86,919Standard deduction$4,850$5,000Itemized DeductionsMedical and dental expenses: Total$5,544$5,544Medical and dental expenses: Deductible00Real estate taxes00State and local taxes5,0005,000Other taxes0Home mortgage interest and points6,9876,987Investment interest0Gifts to charity0Casualty or theft loss(es)0Miscellaneous deductions not subject to 2% limitation0Miscellaneous deductions subject to 2% limitation: Total350350Miscellaneous deductions subject to 2% limitation: Deductible00Total itemized deductions$11,987$11,987Allowed itemized deductions11,52011,569Itemized or standard deduction11,52011,569Exemptions6,2006,400Taxable income$69,199$68,950

TaxIncome tax14,35414,172Self-employment tax8,1808,180Total tax$22,534$22,352CreditsForeign tax credit$0Credit for child and dependent care expenses$0Credit for the elderly or the disabled$0Education credits$0Retirement savings contributions credit$0Child tax credit$0$0Other credits1,3011,301Total credits$1,301$1,301Tax after credits$21,233$21,051PaymentsWithholding0Estimated tax payments0Total payments00Refund (balance due)($21,233)($21,051)

Planning Summary[Name]2005 Year-End Tax Planning: Planning Summary[Date]

Gray cells are calculated for you. You do not need to enter anything in them.CONFIDENTIALFiling Status and Exemptions2,004.002,005.00Filing statusMarried Filing SeparatelyMarried Filing SeparatelyNumber of dependents1.001.00IncomeWages, salaries, tips, etc.42,000.0042,000.00Taxable interest and ordinary dividends25.0025.00Taxable state refunds0.000.00Business income (or loss)57,000.0057,000.00Capital gain (or loss)(3,000.00)(3,000.00)Other gains (or losses)0.000.00Taxable IRA and pension distributions0.000.00Rental real estate, partnerships, S corporations(2,016.00)(2,016.00)Unemployment compensation0.000.00Social Security benefits: Taxable0.000.00Other income0.000.00Total income94,009.0094,009.00Adjustments to IncomeIRA deduction0.000.00One-half of self-employment tax4,090.004,090.00Other adjustments3,000.003,000.00Total adjustments7,090.007,090.00Adjusted gross income86,919.0086,919.00DeductionsStandard deduction4,850.005,000.00Allowed itemized deductions11,520.0011,568.68Larger of itemized or standard deduction11,520.0011,568.68Exemptions6,200.006,400.00Taxable Income69,199.0068,950.00TaxIncome tax14,219.0014,172.00Self-employment tax8,180.008,180.00Total tax22,399.0022,352.00Credits1,301.000.00Tax after credits21,098.0022,352.00Withholding0.000.00Estimated tax payments0.000.00Refund (balance due)(21,098.00)(22,352.00)

Effective tax rate0.210.21Marginal tax rate0.280.28Marginal tax rate: Self-employment income0.430.43

Taxable Social Security Income[Name]2005 Year-End Tax Planning: Taxable Social Security Income[Date]NOTE: If client received social security and made traditional IRA contributions, see IRS Publication 590.Gray cells are calculated for you. You do not need to enter anything in them.CONFIDENTIAL200420051Total Social Security income received$0$02One-half of Social Security income received003Income as prescribed004Tax-exempt interest005Sum of lines 2, 3, and 4 above006Certain adjustments from 1040 (not including IRA)007Provisional income008Enter (a) $32,000 if married filing jointly, or(b) $0 if married filing separately and lived with spouse at any time during year, or(c) $25,000 if all others009Subtract line 8 from line 70010Smaller of line 2, or 50% of line 900

11Enter the smaller of line 10 or:(a) $6,000 if married filing jointly, or(b) $0 if married filing separately and lived with spouse at any time during year, or(c) $4,500 if all others0012Amount from line 70013Enter (a) $44,000 if married filing jointly, or(b) $0 if married filing separately and lived with spouse at any time during year, or(c) $34,000, all others0014Subtract line 13 from line 120015Multiply line 14 by 0.850016Add line 11 and line 150017Multiply line 1 by 0.850018Taxable Social Security income00

Adjustments[Name]2005 Year-End Tax Planning: Adjustments[Date]

NOTE: If client received Social Security income and made traditional IRA contributions, see IRS Publication 590.You do not need to enter anything into shaded cells.CONFIDENTIAL20042005IRA DeductionTaxpayer IRASpouse IRATaxpayer IRASpouse IRATraditional IRA contributions0.0$0$0$0Covered by retirement plan?NoNoNoNoSkip next five lines?YesYes

Amount from Maximum Income table (see below)$0$0$0$0Total income (not including Social Security income)$0$0Other adjustments to income00Adjusted income to compare to maximum limits0000If adjusted income is less than the maximum income, difference0000Multiply by 30% (.30) (or by 35% (.35) if age 50 or older), not less than $2003,00004,0000Earned income94,91094,910

Smallest of contribution, earned income, or maximum$0$0$0$0

2004 Maximum Income for IRA DeductionTaxpayerSpouseActual Taxpayer AmountActual Spouse AmountSingle or head of household$55,000$0$0Qualifying widow(er)75,00000Married filing jointlyIf taxpayer covered by retirement plan160,00000If spouse covered by retirement plan160,00000If neither covered by retirement plan75,00075,00000Married filing separatelyIf lived with spouse during year10,00000If did not live with spouse during year55,00055,0000

2005 Maximum Income for IRA DeductionTaxpayerSpouseActual Taxpayer AmountActual Spouse AmountSingle or head of household$60,000$0$0Qualifying widow(er)80,00000Married filing jointlyIf taxpayer covered by retirement plan160,00000If spouse covered by retirement plan160,00000If neither covered by retirement plan80,00080,00000Married filing separatelyIf lived with spouse during year10,00000If did not live with spouse during year60,00060,0000

IRA Maximum Deduction20042005TaxpayerSpouseTaxpayer SpouseUnder age 503000300040004000Age 50 or older3500350045004500Actual3000300040004000

Tuition and Fees Deduction20042005Tuition and fees paid$4,0004,000

Total income$94,009$94,009Adjustments other than tuition and fees deduction7,0907,090Difference$86,919$86,919Filing statusMarried Filing SeparatelyMarried Filing SeparatelyTotal phaseout amount$80,000$80,000Next level of phaseout65,00065,000Tuition and fees deduction0.00.0

Phaseout Amounts for Tuition and Fees Deduction20042005MarriedFiling JointlyOtherMarriedFiling JointlyOtherTotal phaseout amount$160,000$80,000$160,000$80,000Next level of phaseout130,00065,000130,00065,000

Deductions and Exemptions[Name]2005 Year-End Tax Planning: Standard Deduction, Itemized Deductions, and Exemptions[Date]You do not need to enter anything into shaded cells.CONFIDENTIALAllowed Itemized Deductions20042005Total itemized deductions$11,987$11,987Medical, investment interest, and casualty00Difference (if 0, all allowed)$11,987$11,987Difference multiplied by 0.80$9,590$9,590Adjusted gross income86,91986,919Threshold for itemized deduction phaseout71,35072,975Excess (if 0 or less, all allowed)$15,569$13,944Multiply excess by 0.03467418Smaller of 80% of difference, or 3% of excess467418Allowed itemized deductions$11,520$11,5692004 Standard DeductionRegularOver Age 65 or BlindRegular DeductionAdditional Deduction for AgeAdditional Deduction for BlindnessMarried filing jointly or qualifying widow(er)$9,700$95000$0Single4,8501,200000Head of household7,1501,200000Married filing separately4,8509504850002005 Standard DeductionRegularOver Age 65 or BlindRegular DeductionAdditional Deduction for AgeAdditional Deduction for BlindnessMarried filing jointly or qualifying widow(er)$10,000$1,00000$0Single5,0001,250000Head of household7,3001,250000Married filing separately5,0001,000500000Exemptions20042005Amount per exemption$3,100$3,200Exemption Calculation:Taxpayer and spouse personal exemption3,1003,200Dependent exemptions3,1003,200Total available exemptions$6,200$6,400Adjusted gross income$86,919$86,919Amount for filing status from table below107,025109,475Difference$0$0Difference divided00Multiply by 0.020.00000.0000Multiply line above by total available exemptions00Allowed exemptions$6,200$6,400

Phaseout Amounts for Exemptions20042005Married filing jointly or qualifying widow(er)$214,050$218,950Single142,700145,950Head of household178,350182,450Married filing separately107,025109,475

Tax Calculations[Name]2005 Year-End Tax Planning: Tax Calculations[Date]

You do not need to enter anything into shaded cells.CONFIDENTIALSelf-Employment (SE) Tax20042005Maximum earnings$87,900$90,000Social Security tax rate12.40%12.40%Medicare tax rate2.90%2.90%Self-employment income$57,000$57,000Net earnings from self-employment52,64052,640

Social Security tax6,5276,527Medicare tax1,6531,653Total self-employment tax$8,180$8,180

2004 Individual Income TaxMarried filing jointly (MFJ) or qualifying widow(er) (QW) taxable income0.0--$14,30010%minus0.014,301--58,10015%minus715.0058,101--117,25025%minus6,525.00117,251--178,65028%minus10,042.50178,651--319,10033%minus18,975.00319,101--35%minus25,357.00

Single taxable income0.0--$7,15010%minus0.07,151--29,05015%minus357.5029,051--70,35025%minus3,262.50100,000--146,75028%minus5,373.00146,751--319,10033%minus12,710.50319,101--35%minus19,092.50

Head of household (HOH) taxable income0.0--$10,20010%minus0.010,201--38,90015%minus510.0038,901--100,50025%minus4,400.00100,501--162,70028%minus7,415.00162,701--319,10033%minus15,550.00319,101--35%minus21,932.00

Married filing separately (MFS) taxable income0.0--$7,15010%minus0.07,151--29,05015%minus357.5029,051--58,62525%minus3,262.5058,626--89,32528%minus5,021.2589,326--159,55033%minus9,487.50159,551--35%minus12,678.50

2005 Individual Income TaxMarried filing jointly (MFJ) or qualifying widow(er) (QW) taxable income0.0--$14,60010%minus0.014,601--59,40015%minus730.0059,401--119,95025%minus6,670.00119,951--182,80028%minus10,268.50182,801--326,45033%minus19,408.50326,451--35%minus25,937.50

Single taxable income0.0--$7,30010%minus0.07,301--29,70015%minus365.0029,701--71,95025%minus3,335.0071,951--150,15028%minus5,493.50150,151--326,45033%minus13,001.00326,451--35%minus19,530.00

Head of household (HOH) taxable income0.0--$10,45010%minus0.010,451--39,80015%minus522.5039,801--102,80025%minus4,502.50102,801--166,45028%minus7,586.50166,451--326,45033%minus15,909.00326,451--35%minus22,438.00

Married filing separately (MFS) taxable income0.0--$7,30010%minus0.07,301--29,70015%minus365.0029,701--59,97525%minus3,335.0059,976--91,40028%minus5,134.2591,401--163,22533%minus9,704.25163,226--35%minus12,968.75

Capital Gains Tax200420051. Taxable income$69,199$68,9502. Qualified dividends0.00.03. Capital gains(3,000)(3,000)4. Dividends and capital gains$(3,000)$(3,000)5. Investment interest expense0.00.06. Net dividends and capital gains0.00.07. Taxable income less line 6$69,199$68,9508. Enter the smaller of:The amount on line 1, or$29,050 if single or MFS,$58,100 if MFJ or QW,$38,900 if HOH29,05029,0509. If line 7 < line 8, amount from line 710. Subtract line 9 from line 811. Multiply line 10 by 5%12. If line 6 not equal to line 10, smaller of line 1 or line 60.00.013. Amount on line 100.00.014. Subtract line 13 from line 120.00.015. Multiply line 14 by 15%0.00.016. Tax on amount on line 714,35414,17217. Add lines 11, 15, and 16$14,35414,17218. Tax on amount on line 114,21914,17219. Tax on all taxable income14,21914,172

Effective and Marginal Tax Rates20042005Effective tax rate20.55%20.55%Marginal tax rate28.00%28.00%Marginal tax rate: Self-employment income43.30%43.30%

Credits[Name]2005 Year-End Tax Planning: Credits[Date]

Gray cells are calculated for you. You do not need to enter anything in them.CONFIDENTIALChild Tax Credit20042005Maximum credit per child$1,000$1,000Number of qualifying children maximum amount$1,000$1,000Phaseout1,000$1,000Maximum credit available$0$0Tax$14,354$14,172Certain other credits00If tax does not equal credits, difference$14,354$14,172Smaller of tax or maximum credit$0$0Child Tax Credit AGI Phaseout20042005Adjusted gross income$86,919$86,919Filing statusMarried Filing SeparatelyMarried Filing SeparatelyNumber of children eligible11Beginning phaseout$55,000$55,000Ending phaseout64,00164,001Actual phaseout1,0001,000

Filing Status2004 BeginningAGI Phaseout2005 BeginningAGI PhaseoutMarried filing jointly$110,000$110,000Single, head of household, qualified widow(er)75,00075,000Married filing separately55,00055,000