October 2002

BRIEFS:

Connecticut

Under newly enacted individual income tax provisions, Connecticut Adjusted Gross Income has been modified to create an additional modification. Bonus Depreciation, to the extend deductible in determining federal adjusted gross income, must be added back in computing Connecticut adjusted gross income applicable to taxable years commencing on or after January 1, 2002.

However, under applicable corporation business tax provisions, bonus depreciation deduction is not permitted for certain assets placed in service after September 10, 2001 and before September 11, 2004. Furthermore, this provision requires corporations that have filed tax returns for the 2001 income tax year deducting bonus depreciation on their federal Form 1120 to amend their Connecticut Corporation Business Tax return.

 

Working while collecting Social Security

If you collect Social Security before normal retirement age, now 65, you will lose one dollar in benefits for every two dollars you earn over $ 11,280. But if you wait until after 65 to collect, there is no limit so you collect the full benefit.

Then if your "provisional income"-wages, tips, and all investment income-plus half of your Social Security benefit-does not exceed a base amount($25,000 for single taxpayers or

$ 32,000 for married couples filing jointly, your benefit will not be taxed).

Those taxpayers exceeding these initial levels will be taxed as follows:

If your provisional income is $ 25,001 to $ 34,000 for single people or from $ 32,001 to $ 44,000 for married couples, you will pay taxes on 50 percent of your benefit or on 50 percent of the difference between your provisional income and the base amount, whichever is less.

If your provisional income exceeds $ 34,000 for single people and $ 44,000 for married couples, you will pay taxes on up to 85 percent of your benefit or of the difference between your provisional income and the base amount, whichever is less.

 

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