Those eligible would be single taxpayers or married couples filing jointly
who have no dependents, have taxable income of less than $50,000, no more than $400 in interest income and don't itemize deductions.
50 35% 372,950 Married Filing Jointly
or Qualifying widow (er) $0 $16,700 $0 10% $0 16,700 67,900 1,670.
6013 (d) (3), married taxpayers filing jointly
are jointly and severally liable for tax.
For sales (or exchanges) after May 6, 1997, single taxpayers can exclude up to 5250,000 of gain on the sale of a principal residence; for married taxpayers filing jointly
, the exclusion is $500,000.
The same rule applies to married couples filing jointly
00 35% 357,700 Married Filing Jointly
or Qualifying widow(er) $0 $16,050 $0 10% $0 16,050 65,100 1,605.
As noted, a Social Security recipient must include a portion of his or her benefits in income if he or she exceeds one of three thresholds, based on the individual's status: married taxpayers filing separately who do not live apart for the entire year; single taxpayers, heads of households and married taxpayers filing separately who do live apart from their spouses; and married taxpayers filing jointly
The phase-out range is $150,000-$160,000 for married couples filing jointly
, $95,000-$110,000 for single and head of household filers, and $0-$10,000 for married filing separately.
50 35% 349,700 Married Filing Jointly
or Qualifying Widow(er) $0 $15,650 $0.
The final rules reflect law changes made by the Internal Revenue Service Restructuring and Reform Act of 1998 and the Community Renewal Tax Relief Act of 2000, and provide guidance to married individuals filing jointly
who are seeking relief from joint and several liability.
If a married couple filing jointly
owns the residence as joint tenants or tenants by the entirety or as community property, the exclusion is available as long as one of the spouses meets both the age and use requirements; it is not available if one spouse meets the age requirement and the other the use requirement.
Kessler advises doing the arithmetic for filing jointly
and separately to see which way offers the lowest tax bite.