Insurance Audit Information

This is the first of a series of 2007 Tax reference sheets that I’ll be sharing with you over the next month or so. This one focuses on some of the major federal income tax key numbers. I’ll do future ones for estate planning, retirement planning and business planning in the not too distant future so stay tuned.

Since federal income taxes are such a large part of most peoples life or expenditures, I thought that you might like a summary or reference sheet for some of the important figures for 2007.

Many people believe that if someone is in the 28% tax bracket, they pay all taxes due at the rate of 28% of taxable income. This is not correct. A couple having a taxable income of $125,000 does not pay 25% federal income tax on ALL of the taxable income… but only on everything over $63,700. The first $15,650 is only taxed at 10%, the taxable income from $15,560-$63,700 would be taxed at 15% and so on. The figures below is taxable income (after deductions and exemptions).

I’ll start out with the tax brackets for the 2007 tax year.

The figures below show the various “steps” on how the

marginal income brackets are progressively taxed higher.

Married, Filing Jointly:

$zero – $15,650 is taxed at 10%

$15,650 – $63,700 is taxed at 15%

$63,700 – $128,500 is taxed at 25%

$128,500 – $195,850 is taxed at 28%

$195,850 – $349,700 is taxed at 33%

over $349,700 is taxed at 35%

Married, Filing Separately:

Note: Often times it make more sense for a married couple to file taxes separately for either tax reduction strategies or for non-tax reasons. Your tax advisor should help you decide if there are important reasons for YOU to take advantage of this filing status.

Tax brackets for Married Filing Separately: Simply cut the above taxable figures in half for those six tax brackets

Single:

$zero – $7,825 is taxed at 10%

$7,825 – $31,850 is taxed at 15%

$31,850 – $77,100 is taxed at 25%

$77,100 – $160,850 is taxed at 28%

$160,850 – $349,700 is taxed at 33%

over $349,700 is taxed at 35%

Single, Head of Household:

$zero – $11,200 is taxed at 10%

$11,200 – $42,650 is taxed at 15%

$42,650 – $110,100 is taxed at 25%

$110,100 – $178,350 is taxed at 28%

$178,350 – $349,700 is taxed at 33%

over $349,700 is taxed at 35%

Standard Deduction:

Standard Deduction is ONLY for those who do NOT itemize expenses like mortgage interest, charitable contributions, etc.

Married, Filing Jointly: $10,700

Married, Filing Separately: $ 5,350

Single: $ 5,350

Single, Head of Household: $ 7,850

Those who are blind or over age 65 can ADD $1,050 (if married) or $1,300 (if single or head of household) to the above Standard Deductions

Personal Exemptions:

Personal Exemptions are set at $3,400 per allowed person subject to Phaseouts (which are reductions in the Exemptions) based on taxable income. This is not an issue unless your taxable income is at least $117,300 (depending on filing status).

Maximum taxable EARNED income subject to FICA tax: $97,500

The Social Security and Medicare combined tax rate is 15.3% on income up to that figure. W-2 employees pay half of the 15.3% and employers pay the other half. Self-employed pay the whole amount.

Long-term Capital Gains and Qualified Dividend Rates:

For those in the 10% and 15% Income tax brackets only: 5%

For taxpayers in the higher tax backets: 15%

Capital gains on collectibles (coins, stamps, etc.) 28%

One of the important functions of a financial advisor is to help reduce taxes to your legal minimum due by using all appropriate deductions, methods and strategies. A good tax advisor is worth their weight in gold! So go find a pro-active tax advisor, not someone who just files tax returns.

And now, hopefully you will have a better idea of what that person is talking about.

A Short Sale Can Stop Home Foreclosure & Save Your Credit

Nothing is as detrimental to your credit rating as late mortgage payments and foreclosures. If you have fallen behind on your mortgage payments and are facing home foreclosure, you should consider using a short sale to sell your home now and avoid foreclosure.

One of the most common questions that homeowners ask is, “can I still sell my home if I am in foreclosure?” A Short Sale is simply selling your property for less than what is owed with the permission of your mortgage lender. It is not as complicated as many foreclosure advice experts make it sound, and is one of the best forms of foreclosure help available. There are three steps to closing a short sale: short sale pre-qualification, marketing the property, and closing the short sale.

The first step, short sale pre-qualification, is when you contact your lender and explain that your financial situation has changed and you wish to avoid foreclosure by selling your home. Most lenders have a short sale application that can be faxed or emailed. The application will tell you what documents you will need to gather and submit to your lender in order for them to determine if a short sale is an option. Common documents include paycheck stubs, tax returns, hardship letter, and bank statements. These items show your lender that you are not in a position to repay the loan.

Once your file has been pre-qualified for a short sale, you will market the property to find a qualified buyer. This means hiring a realtor and, if you can afford it, advertising your property in your local newspaper or other real estate publications. Remember, you are not trying to profit from the sale or cover what is owed to your lender. You are simply trying to stop home foreclosure and avoid have a foreclosure on your credit history by helping your lender recover as much of the money they loaned you as possible. It is also important to remember that the foreclosure process can be quite lengthy in some states, so don’t give up using a short sale to avoid foreclosure just because you do not find a buyer immediately.

Lastly, once you have found a qualified buyer, you will submit your purchase contract and the buyer’s credentials (pre-approval letter or proof of funds to close) to your lender. If your lender accepts the offer, then the deal is sent to a title company who will facilitate the closing of escrow. It is also important to order any city of point of sale inspections or other inspections as to avoid delaying your buyer from closing on time.

Once you have completed these steps, you will have stopped home foreclosure and your credit rating will be much better, in most cases, than if you had simply done nothing and lost your home through the foreclosure process. A short sale is a great option to anyone trying to avoid foreclosure.

Chase Card Circuit City Rewards is a new program jointly created and introduced by Chase and Circuit City Stores, Inc. This is the latest credit card reward program from the two companies that aims to empower City Circuit consumers by giving them opportunities to earn rewards in all their Circuit City purchases. The Chase Card City Circuit Rewards can be availed by getting the new Circuit City Rewards Visa Card.

Under the Chase Card Circuit City Rewards, cardholders of the new Circuit City Rewards Visa Card is entitled to earn reward points totaling five percent on all card purchases made at any Circuit City store including through the Circuit City online store. They can also use the card to avail the special financing scheme of Circuit City.

However, the purchases under special financing or installment payment plan and purchase of gift cards are not qualified to earn reward points. But on the other hand, the Chase Card Circuit City Rewards honors the purchases that are made anywhere else by giving cardholders a reward point of one percent if they will use Circuit City Rewards Visa Card in paying their purchases in other establishments.

The Chase Card Circuit City Rewards program also has a flexible redemption process because it allows cardholders to redeem an item from Circuit City for as soon as they accumulated 500 reward points on their accounts. The 500 reward points is equivalent to $5 Circuit City reward certificate which they can be also used to pay for purchases at any Circuit City stores.

The cardholders of Circuit City Rewards Visa Card can likewise view their reward points through the website of Circuit City or by calling the customer service of the company at 800-603-8987. Interested consumers who would like to avail the Chase Card Circuit City Rewards may apply for the new Visa card and they will receive instant credit in Circuit City stores nationwide.

Chase Check Card Leisure Rewards

Chase Check Card Leisure Rewards is one the most popular check cards being used by million of people in and out the United States. Unlike typical check cards, this check card is unique and rewarding to use because it has easy reward features that allow cardholders to earn points when they use the said check card.

To give you an idea about the Chase Check Card Leisure Rewards, think of it as a checking card where you normally issue when paying for any purchase and at the same time give you points that you can redeem for wide variety of merchandise, movie passes, services and even airline tickets at no extra cost to you.

Through the Chase Check Card Leisure Rewards, you can earn points for every $1 spent on qualifying purchases made with this check card. You can also make automatic payment for your utility bills, insurance premiums, membership fees and your other fixed monthly expenses using this card. Simply call a customer service representative to guide you about using this feature.

All of these purchases or payments will be credited toward your bank account and are eligible to become points that you can use to exchange to Chase Leisure Rewards which includes exclusive reward items such as Marriott hotel accommodation, Red Door gift certificates, Continental Airlines tickets, golf and ski passes.

Other purchases that are eligible to become points are those from groceries, gas, restaurant bills as well as phone, mail-order and internet purchases. The Chase Check Card Leisure Rewards however, impose a minimal annual fee of $25. But these can be offset by tremendous range of premium reward items that one can not find in any other reward programs. The cardholders are guaranteed to redeem their desired reward without any restriction or black out dates and they can start redeeming as soon as they accumulated 2000 points.