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Useful Income Tax and Retirement Planning Information
There have been several major tax law changes over the past few years with staggered effective dates. These laws have significantly changed the way you may want to consider your financial situation, especially retirement planning. Here is some information that you find helpful:
Income tax information (2010)
Income tax rate schedules for 2010
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2010 Single Return Rate Schedule
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| Taxable income levels | Tax rate |
| 0 to $8,375 | 10% |
| $8,376 to $34,000 | 15% |
| $34,401 to $82,400 | 25% |
| $82,401 to $171,850 | 28% |
| $171,581 to $373,650 | 33% |
| Over $373,650 | 35% |
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2010 Married Filing Jointly Rate Schedule
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| Taxable income levels | Tax rate |
| 0 to $16,750 | 10% |
| $16,751 to $68,000 | 15% |
| $68,001 to $137,300 | 25% |
| $137,301 to $209,250 | 28% |
| $209,251 to $373,650 | 33% |
| Over $373,650 | 35% |
2010 standard deduction
Married couples filing a joint return - $11,400
Single return filers - $5,700
2010 personal exemption amount - $3,650
Taxation of dividends and long-term capital gains
For taxpayers in the 10% and 15% brackets, qualifying dividends and long-term capital gains (assets held for more than a year) will be taxed at 5%. For those in higher tax brackets, the special tax rate is 15%. These preferential rates were scheduled to expire at the end of 2008, but the 2006 tax law changes extended these rates through 2010.
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Estate taxes
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| Year | Estate Size Where Taxation Starts | Top Estate Tax Rate |
| 2009 | $3,500,000 | 45% |
| 2010 | No estate taxation | |
| 2011 | Reinstatement of old (2001) rates with estates over $675,000 being taxed | 55% |
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Regular IRA and Roth IRA contribution limits
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| For tax year | IRA contribution limit | Additional contribution limits for those age 50 and over |
| 2010 | $5,000 | $1,000 |
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401(k) retirement plan contribution limits
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| For tax year | 401(k) deferral limit | Additional contribution limits for those age 50 and over |
| 2010 | $16,500 | $5,500 |
Education (or Coverdell) IRAs
The annual contribution limit is $2,000 with eligibility phase out beginning at $190,000 (for married filing jointly) and $95,000 of Adjusted Gross Income (some modifications apply).
Annual gift tax exclusion
For 2010, gifts of $13,000 and under are not subject to gift tax.
Social Security
2010 Employee wages subject to Social Security tax of 6.2% - $106,800
2010 Employee wages subject to Medicare tax of 1.45% - no limit
2010 Self employment income subject to Social Security tax of 12.4% - $106,800
2010 Self employment income subject to Medicare tax of 2.9% - no limit
2010 Average monthly benefit for all retired workers - $1,153
2010 Average monthly benefit for retired couples - $1,876
2010 Maximum monthly benefit for a worker at full retirement age - $2,323
BB&T Complete Client Protection
The information provided should not be considered as tax or legal advice. Please consult with your tax advisor and/or attorney regarding your individual circumstances.
Branch Banking and Trust Company, Member FDIC.
The information provided is not intended to be legal, tax, or financial advice. BB&T cannot guarantee that it is accurate, up to date, or appropriate for your situation. Financial calculators are provided to assist you in estimating the approximate costs associated with any bank activity. Your actual costs may vary. You should consult with a qualified attorney or financial advisor to understand how the law applies to your particular circumstances or for financial information specific to your personal or business situation.
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