What The Tax Rates For 2006 ?

Note: The graduated rates below are based on TAXABLE INCOME, which is your adjusted gross income reduced by your allowable deductions (either itemized deductions or the standard deduction) and your allowable deduction for personal exemptions.

Rather than do the math required for the calculation of the tax from these schedules, you may find it easier to use the Tax Tables or Schedules contained in the instructions for the form you are filing.

Standard Deduction (add 3 ^rd column if over age 65 or blind EACH)

Married Filing Jointly and Qualifying Widow(er) $10,300 $1000

Single $5,150 $1,250

Head of Household $7,550 $1,250

Married Filing Separately $5,150 $1000

Personal exemptions for 2006 are $3,300

Note that both itemized deductions and personal exemptions are subject to phase-outs for certain high income taxpayers. Check Form 1040 instructions.

2006 TAX RATES

Married Filing Jointly and Qualifying Widow(er) $0 to $15,100 10%

$15,202 to $61,300 15%

$62,301 to $123,700 25%

$123,701 to $188,450 28%

$188,451 to $336,550 33%

$336,551 & Over 35%

Single $0 to $7,550 10%

$7,551 to $30,650 15%

$30,651 to $74,200 25%

$74,201 to $154,800 28%

$154,801 to $336,550 33%

$326,451 & Over 35%

Head of Household $0 to $10,750 10%

$10,751 to $41,050 15%

$41,051 to $106,000 25%

$106,001 to $171,650 28%

$171,650 to $336,550 33%

$336,551 & Over 35%

Married Filing Separately $0 to $7,550 10%

$7,551 to $30,650 15%

$30,650 to $61,850 25%

$61,850 to $94,225 28%

$94,225 to $168,275 33%

$168,274 & Over 35%

Tax Rate on Dividends and Capital Gains

Dividends.

Taxed as a maximum rate of 15% for clients in the higher brackets and just 5% for taxpayers in the 10% and 15% brackets. This change is retroactive to Jan. 1, 2003 and is scheduled to remain in effect through 2008, except in the year 2008 the rate falls to zero for taxpayers in the 10% and 15% brackets. Beginning Jan. 1, 2009, dividend taxation reverts to current law.

Capital gains.

15% for clients in the higher brackets and 5% for people in the 10% and 15% brackets. This new rate applies for assets sold on or after May 6, 2003, and before Jan. 1, 2009. As with dividends, the capital gains tax rate is zero in the year 2008 for people in the 10% and 15% bracket.

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Tax Disclaimer: To ensure compliance with IRS Rules, any U.S. federal tax advice provided in this communication is not intended or written to be used, and it cannot be used by the recipient or any other taxpayer (i) for the purpose of avoiding tax penalties that may be imposed on the recipient or any other taxpayer under the Internal Revenue Code, or (ii) in promoting, marketing or recommending to another party a partnership or other entity, investment plan, arrangement or other transaction addressed herein.