- quote -

<< How much do I save in 2008 compared to 2007 > << snip original calculations > > > If so, this should reduce my tax by about $800 (roughly).

- quote -


In addition, my crystal ball says that both the standard deduction and the
personal exemptions go up in 2008 by a total of $400. So you save an
additional 15% of $400, or $60. Total savings $460.

[Now someone factor in the increase of social security ... ]
--
Don EA in Upstate NY

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

njoracle wrote:
- quote -

SSA benefits would trigger 85% of your SSA benefits being taxed.
Subtracting your std deduction plus kicker for those over age 65
and your two personal exemptions gets your taxable income below
the 25% marginal tax bracket. As such, your qualified dividends
in 2007 would be taxed at 5%. In 2008, they would not be taxed.
You save 5% of $8000 = $400.

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

I understand that the tax rate for qualified dividends (and capital
gains) is 0% if your joint return had taxable income $65,150 or less.

Suppose I have the following (joint return, both H&W over 65):

Pension 40,000
Social Sec 18,000
Dividends 15,000
of which 8000 are qualified dividends.

In 2007 from above, total Income is 73,000 less 18,000 in deductions for
a taxable income of $55000. Tax due is based on $55,000 which equates to
about $7000. If I have basically the same income for 2008, can I reduce
the total income by $8000 (due to qualified dividends not being taxed)
to $65000? If so, this should reduce my tax by about $800 (roughly).

Are my assumptions correct?

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >