Income Tax 2007

Income Tax 2007 - Tax Brackets, Exemptions, Deductions, and more about Federal Income Tax and State Income Tax Return

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2007 Individual Income Tax Rates, Deductions and Exemptions

Tax return due 2007: April 15, 2008. If your adjusted gross income (AGI) was $54,000 or less in 2007, you can file your Federal Income Tax 2007 by using the IRS Free File to prepare and e-file your taxes online. You can download the most requested forms as well on the IRS-site by clicking on this link: Federal Income Tax Forms. If you're going to file after April 15, you can apply for an extension of time with form 4868 until October 15, 2008.

Use the link State e-filing for free or charged e-filing - not all states got free e-fling. You can download the most requested State Tax Forms by using this link: State Individual Income Tax Forms.

You have to pay federal income tax (see below) and on top of that State Individual Income Tax in most states. Your tax bracket depends upon your income and your tax-filing classification.

There are six Income tax brackets (ranging from 10% to 35%), the brackets per state vary. There are five classifications: singlemarried filing jointlyqualifying widow(er)married filing separately, and head of household.

2007 Federal Income Brackets and Tax Rates

Marginal
Tax Rate
SingleMarried Filing
Jointly or qualifying widow(er)
Married Filing
Separately
Head of
Household
10% $0 - $7,825 $0 - $15,650 $0 - $7,825 $0 - $11,200
15% $7,825 - $31,850 $15,650 - $63,700 $7,825 - $31,850 $11,200 - $42,650
25% $31,850 - $77,100 $63,700 - 128,500 $31,850 - $64,250 $42,650 - 110,100
28% $77,100 - $160,850 $128,500 - $195,850 $64,250 - $97,925 $110,100 - $178,350
33% $160,850 - $349,700 $195,850 - $349,700 $97,925 - $174,850 $178,350 - $349,700
35% $349,700 and more $349,700 and more $174,850 and more $349,700 and more

How does it work? For example: a single without children pays income tax above a filing threshold (see below) of $8,750. This threshold is - not for married filing separately and 65 or older - the Standard Deduction (see below) of $5,350 plus the Personal Exemption (see below) of $3,400. So, a single would actually pay 0% over the first $8,750 of income. After subtracting this amount from her or his income, the brackets start to work. Over the next $7,825 a single pays 10% tax; 15% over the amount between 7,825 and $31,850 etc.

2007 Personal Filing Threshold

Single
under 65
Married Filing jointly 
both under 65
Married filing Separately
(any age)
Head of Household
under 65


Qualified widower
under 65
0 children $8,750 $17,500 $3,400 $11,250 spouse died in 2007, file married for 2007
1 child claim head
of household
$20,900 $14,650 spouse died in 2007 or in one of the 2 previous years and you are not remarried: $14,100
2 children claim head
of household
$24,300 $18,050
65 or older $10,050 $12,550
65 or older (one spouse), no dependent children $18,550
65 or older (both spouses), no dependent children $19,600
65 or older, 1 dependent child spouse died in 2007 or in 1 of the two 2 previous years and you are not remarried: $15,150

Deductions: Individual tax payers are allowed a choice when preparing their income tax returns. They can itemize their deductions from a list of allowable items and subtract those itemized deductions (see below) and their personal exemption deductions (see below) from their AGI to get their taxable income. Or they can choose to subtract the standard deduction (see below) and their personal exemptions. The choice between standard and itemized deduction depends on:

  • a comparison between both types of deductions: what gives more money to subtract?
  • do you have kept records of the items you want to subtract? - you need them as prove.
  • if you are filing as 'Married, Filing separately', and your spouse itemizes, you have to do that to.


2007 Exemptions: for yourself (personal exemption), spouse (if you are married) or your dependents: $3,400 per person.

The exemption is not a subject to federal income tax, but it is the minimal amount of money you need to get by at a subsistent level. The exemptions amount comes on top of your threshold  (see above) with a phaseout if your AGI is above a certain amount (see below). Above this AGI level you must reduce your exemptions by 2% for each $2500 ($1,250 for married filing separately). You can lose no more than 2/3 of the amount of your exemptions with this phaseout, so you are always entitled to a deduction of at least $1,133 (1/3 x $3,400).

Phaseout of exemptions

Filing  Status
Phaseout begins 
at AGI level:
Deduction of  $1,133 
begins at AGI level:
Single $156,400 $278,900
Married filing jointly
or Qualified widow(er)
$234,600 $357,100
Married filing separately $117,300 $178,550
Head of Household $195,500 $318,000

You can take an exemption for yourself  - the personal exemption - or for your dependents, but you cannot do that if you can be claimed as a dependent by another taxpayer - even if this taxpayer doesn't actually claim you as a dependent. If you are married you can claim an exemption for your spouse filing jointly or separately - only if another taxpayer doesn't claim your spouse  as a dependent. You cannot claim a person dependent unless that person is your qualifying child orqualifying relative.

You must always list the social security number (SSN) of any dependent for whom you claim an exemption. If you don't list the SSN the exemption could be denied.

2007 Personal Standard Deductions most people

DeductionsSingleMarried Filingjointly or Qualifying Widow(er)Married Filing SeparatelyHead of HouseholdDependents
Standard $5,350 $10,700 $5,350 $7,850 the greater of $850 or the sum 
of $300 plus 
individuals 
earned income
Blind/Elderly $1,300 $1,050 $1,050 $1,300

You take the Standard Deduction if the Standard Deduction is more than the total of Itemized deductions you can claim (see below). You cannot take the Standard Deduction if you are a nonresident or a dual-status alien this tax year, or if you are married filing separately and your spouse itemizes deductions.


See here TIPS for Itemized Income Tax Deductions:


If you itemize your deductions you cannot take the standard deduction and when the total of your itemized deductions are more than the standard deduction. You itemize if you had large uninsured medical and dental expenses or casualty or theft losses; you paid taxes and interest on your home; you made large charitable contributions; you made employee business expenses or educational expenses or various miscellaneous expenses.

Sources and more info:

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