July 2000

Traditional IRA to ROTH IRA rollovers

If AGI exceeds $ 100,000, then a roll of this type can not be made.

Contributions Roth IRA

Single Individual phases out between AGI $ 95,000-$ 110,000

Married couple phases out between AGI $ 150,000-$ 160,000

Greenspan doesn’t think so, but many Economists praise simplicity of "Taylor Rule".

A few years ago, John Taylor suggested that the Federal Reserve use the following rule in setting interest rates that if " inflation is one percentage point above the Fed’s goal, rates should rise 1.5 percentage points. And if-in a recession, for instance-an economy’s total output is one percentage point below its full capacity, rates should fall by half a percentage point. Period".

TAX INFORMATION

Social Security Base

1996........................ $ 62,700.00

1997........................ $ 65,400.00

1998....................... $ 68,400.00 ......6.20 %

1999........................ $ 72,600.00 ......6.20 %

2000........................ $ 76,200.00 .......6.20 %

Medicare

1998....................... No Limit 1.45 %

1999....................... No Limit 1.45 %

2000....................... No Limit 1.45 %

FUTA

1999........................ $ 7,000.00 .8% Max $ 56

New Jersey SUI

1998........................ $ 19,300.00

1999........................ $ 20,200.00

Employee rate.............. .925%

UI/DI base week amount..... $ 144

Maximum weekly benefit..... $ 407

New Jersey State W/H .......................... 1.4%-6.37%

New York SUI 1998........................ $ 7,000.00

Pennsylvania State W/H 2.8% SUI Base $ 8,000

Household Employee social security reporting threshhold

1999........................ $ 1,100.00

2000........................ $ 1,200.00

Minimum Wage Fed'l, PA, NJ ....................... $ 5.15

Exclusion for elective deferrals under 401(k) plans

1999........................ $ 10,000.00

2000........................ $ 10,500.00

 

Age 55: Penalty-free withdrawals from company retirement plans upon separation from service.

Age 591/2 No penalty on any withdrawals from IRAs and retirement plans/accounts

Age 62: Earliest age that Social Security retirement benefits can be collected. (Widows and widowers can receive these benefits as early as age 60).

Age 65 to 67 Full Social Security benefits. The exact age depends on the year in which you were born.

Age 70: Earned income no longer reduces Social Security benefits-if you are under age 65, $1 is cut from your benefit for every $ 2 earned above threshold

1998........................ $ 9,120

1999........................ $ 9,600

2000........................ $ 10,800

From ages 65 to 69, $ 1 is cut for every $ 3 earned above threshold

1998........................ $ 14,500

1999........................ $ 15,500

2000........................ $ 17,000

 

Age 701/2 Minimum distributions must be withdrawn from most retirement accounts. But-you can continue to invest tax-deferred in a Roth IRA. No penalty on any withdrawals from IRAs and retirement plans/accounts

Maximum Defined benefit plan

1999........................ $ 130,000

2000........................ $ 135,000

Maximum Deferred contribution plan

1999........................ $ 30,000

2000........................ $ 30,000

Maximum Defined benefit and Deferred contribution plan

1999........................ $ 160,000

2000........................ $ 170,000

Maximum Annual Compensation for Highly Paid Individuals

1999........................ $ 80,000

2000........................ $ 85,000

Exclusion from Federal Estate Taxes

1999........................ $ 650,000

2000........................ $ 675,000

 

2006........................ $ 1,000,000

Automobile optional standard mileage rate

1999........................ $ .31 (Charity .10; Med .14)

2000........................ $ .325(Charity .10; Med .14)

Automobile Leased standard automobile cost

1999........................ $ 27,100

2000........................ $ 27,300

 

2000 cost-of-living adjustment (COLA).................... $ 2.4%

Maximum monthly Social Security benefit for worker retiring

At age 65 in January 2000........................ $ 1,433

 

Average monthly Social Security benefits

All retired workers.............................. $ 804

Couple, both receiving benefits................... $ 1,348

Widow(er)......................................... $ 775

Standard federal monthly SSI payments

Individual....................................... $ 512

Couple........................................... $ 769

 

Medicare Part B Monthly premium

1999........................ $ 45.50

2000........................ $ 45.50

 

Medicare Part B deductible

1999........................ $ 100

2000........................ $ 100

 

Medicare Part A deductible, hospital stay-first 60 days $ 776

Copayment for 61-90........................ $ 194/day

Copayment for lifetime reserve days............ $ 388/day

Copayment for skilled-nursing facility, days 21-100$ 97/day

 

Starting in January 1999, the Bureau of Labor Statistics (BLS) will use a new formula, called the geometric mean estimator, to calculate the price changes for several categories in the consumer price indexes (CPI) This formula takes into account the fact that consumers typically respond to higher prices by making substitutions in their purchases. The BLS estimates that the new formula will reduce the CPI by .2% per year. The Categories that will not use the new formula include certain housing, utility and medical costs.

The CPI is widely used as an economic indicator (measure of inflation); as a deflator for other information (adjusted for price changes); as a means for adjusting income payments and tax brackets.

Do not make large purchases of stock or balanced-share funds for taxable accounts between October and year end. Funds typically distribute capital gains late each year, usually in December. If you buy shares right before the record date, the days on which current holders become eligible for payouts, you typically will receive a taxable distribution.

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