Missouri Dairy Business UpdateCommercial Agriculture
Volume 2, Number 11

November 2002


Year-end income tax planning

Dairymen wanting to do some end of the year tax planning may want to use the following table prepared by Parman Green, Extension Ag Business Specialist.

INTERESTING TAX TIDBITS
  1997   1998   1999   2000   2001   2002   2003
 
 
 
 
 
 
 
Standard Deductions:                          
   Married, filing joint return 6,900   7,100   7,200   7,350   7,600   7,850    
   Surviving Spouse 6,900   7,100   7,200   7,350   7,600   7,850    
   Head of Household 6,050   6,250   6,350   6,450   6,650   6,900    
   Unmarried 4,150   4,250   4,300   4,400   4,550   4,700    
   Married, filing separate return 3,450   3,550   3,600   3,675   3,800   3,925    
   Dependent Std. Deduction Minimum 650   700   700   700   750   750    
   Additional amount for blindness &/or age 800/1,000   850/1,050   850/1,050   850/1,100   900/1,100   900/1,150    
                           
Exemptions:                        
   Personal and Dependent Amount 2,650   2,700   2,750   2,800   2,900   3,000    
   Jt. Return or Surviving Spouse (phaseout) 181,800   186,800   189,950   193,400   199,450   206,000    
   Head of Household (phaseout) 151,500   155,650   158,300   161,150   166,200   171,650    
   Unmarried (phaseout) 121,200   124,500   126,600   128,950   132,950   137,300    
   Married, filing separate return (phaseout) 90,900   93,400   94,975   96,700   99,725   103,000    
                           
Itemized Deductions:                          
   Married, filing separate (phaseout) 60,600   62,250   63,300   64,475   66,475   68,650    
   Others (phaseout) 121,200   124,500   126,600   128,950   132,950   137,300    
                           
Transportation:                          
   Business Mileage Rate 31.5   32.5   32.5/31   32.5   34.5   36.5   36.0
   Charitable Mileage Rate 14   14   14   14   14   14   14
   Medical & Moving Mileage Rate 10   10   10   10   12   13   12
   Max. 1st Yr. Deprec. - Passenger Auto 3,160   3,160   3,060   3,060   7,660   7,660   7,660
                           
Earned Income Credit:                          
   One child (max. income) 25,760   26,473   26,928   27,413   28,281   29,201    
   2+ children (max. income) 29,290   30,095   30,580   31,152   32,121   33,178    
   No children (max. income) 9,770   10,030   10,200   10,380   10,710   11,060    
   One child (max. credit) 2,210   2,271   2,312   2,353   2,428   2,506    
   2+ children (max. credit) 3,656   3,756   3,816   3,888   4,008   4,140    
   No children (max. credit) 332   341   347   353   364   376    
                           
Social Security                          
   OASDI 12.4%   12.4%   12.4%   12.4%   12.4%   12.4%   12.4%
   Medicare 2.9%   2.9%   2.9%   2.9%   2.9%   2.9%   2.9%
   OASDI Max. Base 65,400   68,400   72,600   76,200   80,400   84,900   87,000
   Quarter of Coverage Cost 670   700   740   780   830   870   890
   Max. Earnings Test:           less than 65 8,640   9,120   9,600   10,080   10,680   11,280   11,520
                                         65 through 69 13,500   14,500   15,500   N/A   N/A   N/A   N/A
   Max. SS Benefit @65: 1,326   1,342   1,373   1,433   1,536   1,660   1,741
AIME Bend Points:          90% <455   <477   <505   <531   <561   <592    
                                     32% 455   477   505   531   561   592    
                                     15% >2,741   >2,875   >3,043   >3,202   >3,381   >3567    
                           
Adjusted Gross Income Limits:                          
   Casualty Loss Threshold 10.0%   10.0%   10.0%   10.0%   10.0%   10.0%   10.0%
   Medical Deduction Threshold 7.5%   7.5%   7.5%   7.5%   7.5%   7.5%   7.5%
   Misc. Itemized Deduction Floor 2.0%   2.0%   2.0%   2.0%   2.0%   2.0%   2.0%
                           
Miscellaneous:                          
   Unified Credit 192,800   202,050   211,300   220,550   220,550   345,800   345,800
   Unified Credit Applicable Exclusion 600,000   625,000   650,000   675,000   675,000   1,000,000   1,000,000
   Annual Gift Exclusion 10,000   10,000   10,000   10,000   10,000   11,000   11,000
   Special Land Use (max. reduction) 750,000   750,000   750,000   770,000   800,000   820,000   840,000*
   Section 179 Deduction 18,000   18,500   19,000   20,000   24,000   24,000   25,000
   SE Health Ins. Deduction 40%   45%   60%   60%   60%   70%   100%
   Generation Skipping Exemption 1,000,000   1,000,000   1,000,000   1,030,000   1,060,000   1,100,000   1,150,000*
                           
* = estimated      
excel/interesting tax tidbits.xls          Data Compiled By Parman R. Green, UO&E Ag. Business Mgmt. Specialist          Updated 10-22-2002

Additional Farm Tax Resources:

Missouri's Ag Tax Tidbits http://agebb.missouri.edu/agtax/
IRS Farmers Tax Guide http://www.irs.gov/pub/irs-pdf/p225.pdf
Purdue's Tax Planning for Farmers http://www.agecon.purdue.edu/ext/tax/taxplan2002.htm


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