Tax Facts for 2004

Physician's Money Digest, October31 2003, Volume 10, Issue 20

Their forecasts:

Knowing whether you'll be in a higheror lower tax bracket next year canaffect your year-end tax plans. Althoughthe IRS hasn't yet released official numbers,which are adjusted every year forinflation, some private firms have aremarkable track record for accuratelypredicting what the new bracket rangeswill be, based on government inflationreports. A married couplefiling jointly will need a taxableincome of more than $319,000 to crackthe top 35% bracket next year, up from$311,950 this year. The 33% bracket willkick in at $178,650, up from $174,700,and the 28% bracket will begin at$117,250, compared with $114,650 thisyear. A taxable income of between$58,100 and $114,650 will put you in the25% bracket. Last year the lower limitfor that bracket was $56,800.


Inflation adjustments will have animpact on more than just tax bracketranges. The standard deduction for marriedcouples filing jointly will be $9700next year, compared with $9500 thisyear. The standard deduction for singleswill go up $100 to $4850. The personalexemption for you and any dependentswill rise $50 to $3100. Income thresholdsfor so-called "stealth" taxes will alsoincrease. The personal exemption phase-outwill begin when your adjusted grossincome (AGI) reaches $214,050, upfrom $209,250 this year. The limit onitemized deductions will start when yourAGI clears $142,700, compared with$139,500 this year. AGI is yourgross income less certain credits, like IRAcontributions. Taxable income is yourincome after all exemptions, deductions,and credits have been backed out.