T R A D I T I O N A L
A N D
R O T H
I R As ,
S E Ps
2002-2004
2005
2006 - 2007
2008
$3,000
$4,000
$4,000
$5,000
$500
$500
$1,000
$1,000
Regular
Catch-Up*
* Only taxpayers age 50 and over are eligible to make catch-up contributions
Roth Contribution Phase-out
AGI phase-out range for contributions to Roth IRAs in 2008:
4Married filing jointly: $159,000 – $169,000 4Single: $101,000 – $116,000
4Married filing separately: $0 – $10,000
Traditional IRA Deductibility Rules
Covered by
Filing Employer's
Status Retirement Plan?
SINGLE
No
Yes
Modified AGI 2007
Any amount
$52,000 or less
$52,001-$61,999
$62,000 or more
M A R R I E D F I L I N G J O I N T LY
Neither Spouses
Covered
Both Spouses
Covered
One Spouse
Covered —
For Covered
Spouse
One Spouse
Covered —
For Non-Covered
Spouse
R EQ U I R ED
M I N I M U M
2008
D I S T R I B U T I O N S
Uniform Lifetime Table
Contribution Limits
Modified AGI 2008
Deductibility
Any amount
Full deduction
$53,000 or less
Full deduction
$53,001-$62,999 Partial deduction
$63,000 or more
No deduction
Any amount
Any amount
Full deduction
$83,000 or less
$85,000 or less
Full deduction
$83,001-$102,999 $85,001-$104,999 Partial deduction
$103,000 or more
$105,000 or more
No deduction
$83,000 or less
$85,000 or less
Full deduction
Current
Age
Distribution
Period
Current
Age
70
71
72
73
74
75
76
77
78
79
80
81
82
83
84
85
86
87
88
89
90
91
92
27.4
26.5
25.6
24.7
23.8
22.9
22.0
21.2
20.3
19.5
18.7
17.9
17.1
16.3
15.5
14.8
14.1
13.4
12.7
12.0
11.4
10.8
10.2
93
94
95
96
97
98
99
100
101
102
103
104
105
106
107
108
109
110
111
112
113
114
115 and older
9.6
9.1
8.6
8.1
7.6
7.1
6.7
6.3
5.9
5.5
5.2
4.9
4.5
4.2
3.9
3.7
3.4
3.1
2.9
2.6
2.4
2.1
1.9
$83,001-$102,999 $85,001-$104,999 Partial deduction
$103,000 or more
$105,000 or more
No deduction
$156,000 or less
$159,000 or less
Full deduction
Q U A L I F I ED
$169,000 or more
P L A N S
2007
2008
$15,500
$10,500
$46,000
$500
$46,000
$230,000
$185,000
Prudential, Prudential Financial, the Rock logo, and the Rock Prudential logo
are registered service marks of The Prudential Insurance Company of
America and its affiliates.
2006
2007
2008
401(k), 403(b)
SAR-SEP and 457 Plans $3,000
$4,000
$5,000
$5,000
$5,000
SIMPLE Plans
$2,000
$2,500
$2,500
$2,500
$1,500
is an independent organization and is not an affiliate of Prudential Financial.
sells life insurance products of Prudential Financial's affiliated life insurance
companies in addition to other life insurance company products. is
authorized to sell and service certain life insurance products of Prudential
Financial's companies as well as use this material.
$150,000
$4,312.50
2005
Over
But Not Over
The Tax Is:
Of The Amount Over
$0
10,000
$0 + 18%
$0
10,000
20,000
$1,800 + 20%
10,000
20,000
40,000
$3,800 + 22%
20,000
40,000
60,000
$8,200 + 24%
40,000
60,000
80,000
$13,000 + 26%
60,000
80,000
100,000
$18,200 + 28%
80,000
100,000
150,000
$23,800 + 30%
100,000
150,000
250,000
$38,800 + 32%
150,000
250,000
500,000
$70,800 + 34%
250,000
500,000
750,000
$155,800 + 37%
500,000
750,000
1,000,000
$248,300 + 39%
750,000
1,000,000
1,250,000
$345,800 + 41%
1,000,000
1,250,000
1,500,000
$448,300 + 43%
1,250,000
1,500,000
—
$555,800 + 45%
1,500,000
Subtract Applicable Credit Below from Calculated Tax:
Exclusion Amount
Federal Credit
Gift Tax Exclusion
1,000,000
345,800
1,500,000
555,800*
2,000,000
780,800*
3,500,000
1,455,800*
Estate tax repealed, Gift tax remains
1,000,000
345,800
1,000,000
1,000,000
1,000,000
1,000,000
1,000,000
1,000,000
Other Estate and Gift Tax Planning Items
Prudential Financial, its affiliates and representatives do not render tax
or legal advice. You should consult with your tax and/or legal advisor
concerning your particular circumstances.
2004
TAX RAT ES
*Federal credit for gift taxes limited to $345,800
$105,000
Catch-up Contribution Limits for Other Qualified Plan Types
2 0 0 8 ESTAT E AND GIFT
If Taxable Estate/Gift Is:
2002-2003
2004-2005
2006-2008
2009
2010
2011
No deduction
Maximum elective deferral to retirement plans,
(e.g., 401(k), 403(b) and 457 plans)
$15,500
Maximum elective deferral to SIMPLE 401(k) plans
$10,500
Limit on annual additions to SEP plans
$45,000
Annual compensation threshold requiring SEP contribution
$500
$45,000
Limit on annual additions to defined contribution plans
Maximum annual compensation taken into account for
contributions
$225,000
$180,000
Annual benefit limit under defined benefit plans
Threshold amount for definition of highly
compensated employee
$100,000
Threshold amount for definition of key employee/officer
in top-heavy plans
$145,000
PBGC monthly guaranteed pension amount at age 65 (single life)
courtesy of
THE PRUDENTIAL INSURANCE
C O M PA N Y O F A M E R I C A
Estate Tax
$156,001-$165,999 $159,001-$168,999 Partial deduction
$166,000 or more
EASY REFERENCE
TAX GUIDE
Distribution
Period
©2008 The Prudential Insurance
Company of America
751 Broad Street, Newark,
NJ 07102-3777
www.prudential.com
IFS-A127507 Ed. 01/2008
2007
Annual gift tax exclusion
Annual gift tax exclusion for non U.S. citizen spouses
Generation skipping tax (GST) exemption
IRC § 6166 2% limit for deferred estate tax payments
Special use valuation for qualified real property
Euclid Managers
234 Spring Lake Drive
Itasca, IL 60143
800-345-7868
2008
$12,000
$12,000
$125,000
$128,000
$2,000,000 $2,000,000
$1,250,000 $1,280,000
$940,000
$960,000
I N C O M E
If Taxable Income Is:
Over
TA X
2007
But Not Over
The Tax Is:
Of The Amount Over
Married Filing Jointly and Surviving Spouses:
$0
15,650
63,700
128,500
195,850
349,700
If Taxable Income Is:
Over
But Not Over
15,650
63,700
128,500
195,850
349,700
—
$0 + 10%
$1,565 + 15%
$8,773 + 25%
$24,972 + 28%
$43,831 + 33%
$94,601 + 35%
$0
15,650
63,700
128,500
195,850
349,700
7,825
31,850
77,100
160,850
349,700
—
$0 + 10%
$783 + 15%
$4,386 + 25%
$15,699 + 28%
$39,149 + 33%
$101,469 + 35%
$0
7,825
31,850
77,100
160,850
349,700
$0
16,050
65,100
131,450
200,300
357,700
Married Filing Separately:
$0
7,825
31,850
64,250
97,925
174,850
The Tax Is:
Of The Amount Over
16,050
65,100
131,450
200,300
357,700
—
$0 + 10%
$1,605 + 15%
$8,963 + 25%
$25,550 + 28%
$44,828 + 33%
$96,770 + 35%
$0
16,050
65,100
131,450
200,300
357,700
8,025
32,550
78,850
164,550
357,700
—
$0 + 10%
$803 + 15%
$4,481 + 25%
$16,056 + 28%
$40,052 + 33%
$103,792 + 35%
$0
8,025
32,550
78,850
164,550
357,700
$0 + 10%
$803 + 15%
$4,481 + 25%
$12,775 + 28%
$22,414 + 33%
$48,385 + 35%
$0
8,025
32,550
65,725
100,150
178,850
$0 + 10%
$1,145 + 15%
$5,975 + 25%
$23,225 + 28%
$42,755 + 33%
$100,604 + 35%
$0
11,450
43,650
112,650
182,400
357,700
$0 + 15%
$330 + 25%
$1,068 + 28%
$1,824 + 33%
$2,764 + 35%
$0
2,200
5,150
7,850
10,700
Married Filing Separately:
7,825
31,850
64,250
97,925
174,850
—
$0 + 10%
$783 + 15%
$4,386 + 25%
$12,486 + 28%
$21,915 + 33%
$47,301 + 35%
$0
7,825
31,850
64,250
97,925
174,850
$0 + 10%
$1,120 + 15%
$5,838 + 25%
$22,700 + 28%
$41,810 + 33%
$98,356 + 35%
$0
11,200
42,650
110,100
178,350
349,700
$0 + 15%
$323 + 25%
$1,035 + 28%
$1,777 + 33%
$2,701 + 35%
$0
2,150
5,000
7,650
10,450
Head of Household:
$0
11,200
42,650
110,100
178,350
349,700
Estates and Trusts:
Personal Exemptions
$0
11,450
43,650
112,650
182,400
357,700
11,450
43,650
112,650
182,400
357,700
—
$0
2,200
5,150
7,850
10,700
2,200
5,150
7,850
10,700
—
Alternative Minimum Tax:
Exemption
2007
2008
2007
2008
$3,400
$3,500
$3,400
$3,500
Phase-out Range
$234,600/357,100
$239,950/362,450
$156,400/278,900
$159,950/282,450
Child Tax Credit
$1,000 per child phases out $50 for each $1,000 of modified AGI over $110,000
(married filing jointly), or $75,000 (single)
Standard Deductions
2007
2008
2007
2008
Annual
Add'l Age 65 or Older, or Blind
$10,700
$10,900
$5,350
$5,450
$1,050
$1,050
$1,300
$1,350
Phase-out of Itemized Deductions
4Reduced by 3% of taxpayer's AGI in excess of $159,950 ($156,400 in 2007)
4Married filing separately $79,975 ($78,200 in 2007)
4Reduction is equal to 1/3 of the lesser of (1) 3% of AGI over the threshold amount or
(2) 80% of the itemized deductions otherwise allowable.
Capital Gains Tax:
Taxpayer in:
8,025
32,550
65,725
100,150
178,850
—
Estates and Trusts:
2,150
5,000
7,650
10,450
—
Married Filing
Jointly
Single
$0
8,025
32,550
65,725
100,150
178,850
Head of Household:
11,200
42,650
110,100
178,350
349,700
—
$0
2,150
5,000
7,650
10,450
$0
8,025
32,550
78,850
164,550
357,700
Short Term <12 MONTHS
Long Term >12 MONTHS
ordinary rate
ordinary rate
5% in 2007, 0% in 2008
15%
First
Amounts over
Married Filing Jointly
Single
2007
2008
$175,000
$175,000
$175,000
$175,000
Exemption
Exemption
$66,250
$44,350
26%
28%
2007
2008
$850
$850
$1,700
$900
$900
$1,800
(Education IRAs) — Contribution Limit $2,000
AGI phase-out range for contributions to Coverdell Education Savings Accounts:
4Married Filing Jointly $190,000 – $220,000 4Single $95,000 – $110,000
Qualified Tuition Programs — Section 529 Plans
Distributions after 12/31/2001 used for qualified higher education expenses are
income tax free
Hope and Lifetime Learning Credits
Hope Credit — Up to $1,800 per student for first 2 years of higher education tuition paid
Lifetime Learning Credit — Up to 20% of up to $10,000 tuition paid, calculated per
taxpayer
AGI Phase-outs:
Married Filing Jointly
Others
2007
2008
$94,000-$114,000
$47,000-$57,000
$96,000-$116,000
$48,000-$58,000
Exclusion of U.S. Savings Bond Income
AGI Phase-outs:
Married Filing Jointly
Others
2007
2008
$98,400-$128,400
$65,600-$80,600
$100,650-$130,650
$67,100-$82,100
Student Loan Interest — Maximum Deduction $2,500
AGI Phase-outs:
Married Filing Jointly
Others
Deductibility Period
2007
2008
$110,000-$140,000
$55,000-$70,000
No time limit
$115,000-$145,000
$55,000-$70,000
No time limit
Deduction for Higher Education Expenses (2007)*
Maximum deduction: $4,000 if Modified AGI is less than the following range:
Maximum deduction: $2,000 if Modified AGI is within the following range:
Maximum deduction: $0 if Modified AGI is above the following range:
4Married Filing Jointly: $130,000-$160,000 4Single: $65,000-$80,000
4All others: $0
* Unknown for 2008
S O C I A L
S EC U R I T Y
Base Amount of Modified AGI causing Social Security
Benefits to be Taxable:
50% Taxable
85% Taxable
$32,000
$25,000
$44,000
$34,000
Married Filing Jointly
Single
Maximum Earnings Before Social Security Benefits are
Reduced:
Under full retirement age
Unknown
Unknown
(lose $1 for every $2)
In the year of retirement (lose $1 for every $3)
for months prior to full retirement
Kiddie Tax:
First
Next
Amounts over:
I N C EN T I V ES
Coverdell Education Savings Accounts
Single:
$0
7,825
31,850
77,100
160,850
349,700
10, 15% Bracket
Other Brackets:
2008
Married Filing Jointly and Surviving Spouses:
Single:
Married
Filing Jointly
Single
ED U C AT I O N
C O M PA R I S O N
No Tax
10% Tax
Parent’s Rate
Corporations:
Taxable income
Tax on Income
Rate on Excess
$0
$50,000
$75,000
$100,000
$335,000
$10,000,000
$15,000,000
$18,333,333
$0
$7,500
$13,750
$22,250
$113,900
$3,400,000
$5,150,000
$6,416,667
15%
25%
34%
39%
34%
35%
38%
35%
At full retirement age
2007
2008
$12,960
$13,560
$34,440
No Limit
$36,120
No Limit
Maximum Compensation Subject to FICA Taxes:
OASDI (Social Security) maximum
HI (Medicare) maximum
2007
2008
$97,500
No Limit
$102,000
No Limit
OASDI tax rate: 12.4% self-employed, 6.2% employees
HI tax rate: 2.9% self-employed, 1.45% employees
L O N G
T ER M
C A R E
I N S U R A N C E
Maximum Qualified LTC Premium Eligible for Deduction:
Age
2007
2008
40 or less
41 - 50
51 - 60
61 - 70
Over 70
$290
$310
$550
$580
$1,110
$1,150
$2,950
$3,080
$3,680
$3,850
Qualified LTC contract per diem limit: $270 ($260 in 2007)
IFS-A127507 Ed. 01/2008