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The Online Advisor - February 2000
Note these tax changes for 2000
Among the tax changes that you need to be aware of in 2000 are the following:
* The estate and gift tax exemption increases from $650,000 to $675,000.
* The wage base for social security taxes increases from $72,600 to $76,200.
* The social security earnings limit for 2000 is $10,080 for those under age 65 and $17,000 for those 65 through 69. As always, there’s no earnings limit for those 70 and older.
* The luxury tax on cars drops to 5% on amounts above $38,000, a decrease from the 1999 tax of 6% on amounts over $36,000.
* The maximum 2000 contribution allowed for 401(k) plans increases from $10,000 to $10,500.
* The IRS will accept credit card payment of estimated tax payments for the 2000 tax year. Fees to pay by credit card will run about 1.5% to 2.5% of the tax being paid.
* The amount of business equipment that can be expensed in 2000 increases from $19,000 to $20,000.
* The maximum interest deduction on college loans increases in 2000 from $1,500 to $2,000.
* The prior-year safe harbor for estimated taxes of those with income over $150,000 increases from the 1999 level of 105% to 108.6%.
* The threshold at which payroll taxes must be paid on household workers increases from $1,100 to $1,200.