Important Numbers Every CFP should Know

Housing Expense Ratio
Less than or equal to 28% of gross income

Total Monthly Debt Ratio
Less than or equal to 36% of gross income

Consumer Debt Ratio
Less than or equal to 20% of net income

American Opportunity Credit
100% of first $2,000 + 25% of next $2,000

American Opportunity Credit Phaseout
160 - 180

Lifetime Learning Credit
20% of first $10,000

Lifetime Learning Credit Phaseout
102 - 122

Coverdell ESA Contribution
Per recipient: $2,000 per year

Coverdell ESA Phaseout
190 - 220

Savings Bonds Phaseout
105 - 135

Student Loan Interest Deduction
Maximum annual limit of $2,500

Student Loan Interest Deduction Phaseout
120 - 150

HSA Tax Deductible Contribution Maximum
$3,050 (single)
$6,150 (family)

HSA Deductible Minimums
$1,200 (single)
$2,400 (family)

HSA Maximum Out-of-Pocket
$5,950 (single)
$11,900 (family)

HSA Catch-up Contribution
$1,000 for age 55+

MSA Deductible Minimums
$2,050 - $3,050 (single)
$4,100 - $6,150 (family)

LTC Itemized Limitations
Ages 51-60: $1,270
Ages 61-70: $3,390

Medicare - Cost for Days 1-20 Skilled Nursing
None

Medicare - Cost for Days 21-100 Skilled Nursing
$141.50 per day

Medicare - Cost for Days 100+ Skilled Nursing
Full Pay
No Medicare Coverage

FSA Contribution Limit
$5,000

Dependent Care FSA Reimbursement Limit
$5,000

REIT Income from Real Estate Minimum
75%

Frivolous Return Penalty
$5,000

Negligence Penalty
20% of the Portion of Underpayment Attributed to Negligence

Fraud Penalty
75% of the Portion of Underpayment Attributed to Fraud

To Avoid the Estimated Tax Penalty
Pay the lesser of 90% of current year tax liability
or 100% of the prior year's tax penalty
(110% if 2010 AGI exceeded $150,000)

Entertainment Expense Deduction
Subject to 50% Limit
2% AGI Floor

Income Limit for Parents to be Claimed as Dependents
$3,700

Kiddie Tax
Unearned income in excess of $1,900

Credit for Depend Care Expenses
$3,000 / $6,000 (1 dependent / 2+ dependents) x 20%

Child Tax Credit
$1,000 for each child under 17

Child Tax Credit Phaseout
$110,000 MAGI (married-jt)
Reduced by $50 for each $1000 above phaseout

Adoption Credit
$13,360

Adoption Credit Phaseout
185 - 225

Net Operating Loss (NOL) Carryforward/Carryback
Carried back 2 years
Carried forward 20 years

Corporate Dividend Received Deduction
70% excluded if corporation owns 20% of distributing corporation
80% excluded if corporation owns 20-80% of distributing corporation
100% excluded if corporation owns greater than 80% of distributing corporation

Tax Rate for PSC
35% Flat Tax

Corporate Accumulated Earnings Tax
15% of Accumulated Taxable Income above $250,000 retained without need

Estate Income Tax Exemption
$600

MACRS Mid-Quarter Convention
Use when more than 40% of depreciable personal property is placed in service during the last three months of the year

MACRS 5-year property
Year 1: 20%
Year 2: 32%

MACRS 7-year property
Year 1: 14.29%
Year 2: 24.49%

Section 179 Deduction
Expense up to $500,000 of qualifying property in the year of acquisition

Gross Income Exclusion for Sale of Residence
$500,000 (married-jt)
$250,000 (single)

AMT for Corporations
Gross receipts in excess of $7.5 million

Real Estate Activity Deduction
$25,000 per year of net losses from RE activity

Real Estate Activity Deduction Phaseout
100 - 150

Home is Treated As Residence
Owner's person use exceed 14 days or 10% of rental period

Historic Rehabilitation Deduction-Equivalent Tax Credit
$25,000

Historic Rehabilitation Phaseout
200 - 225

Low Income Housing Deduction-Equivalent Tax Credit
$25,000

Low Income Housing Phaseout
None

Maximum Charitable Deduction
50% of AGI
Excess can be carried forward for 5 years

Maximum Charitable Deduction for LTCG Property
30% of AGI

Maximum Charitable Deduction for Cash
50% of AGI

Maximum Charitable Deduction for Inventory, Art, STCG, or Unrelated Use
Basis up to 50% of AGI

Maximum Charitable Deduction for Private Charities
30% of AGI

Maximum Charitable Deduction for Business
10% of Taxable Income

Fully Insured for OASDI
40 quarters of coverage

One Quarter of Coverage
$1,120

Currently Insured
6 quarters of coverage

Earnings Limit for Younger Than Full Retirement Age (full year)
Government will deduct $1 for every $2 over $14,160

Earnings Limit for Younger Than Full Retirement Age (partial year)
Government will deduct $1 for every $3 over $37,680

50% of Social Security Benefits Taxed
MAGI + 1/2 SSI exceeds:
25 / 32

85% of Social Security Benefits Taxed
MAGI + 1/2 SSI exceeds:
34 / 44

PIA Reduction for first 36 months worker is under NRA
1/180

Maximum Contribution an Employee Can Receive
Lesser of 100% of Salary or $49,000

Maximum Deduction for Employer for Defined Contribution
25% of Salary (up to $245,000)

Maximum Salary Reduction for SIMPLE IRA
$11,500
Catch-up Age 50+: $2,500

Maximum Salary Reduction for SARSEP
$16,500

Maximum Salary Reduction for 403(b)
$16,500

Solo-401(k) / Uni-401(k) Contributions
Employee: $16,500
Catch-up Age 50+: $5,500
Employer: $49,000

Safe Harbor 401(k) - Matching
$1 / $1 match first 3%
$0.50 / $1 match for next 2%

Safe Harbor 401(k) - Nonelective
3% whether employee contributes or not

Section 415 Limit
For benefit beginning at age 65,
annuity benefit is the lesser of $195,000
or 100% of participant's compensation averaged over the three highest earning consecutive years

Minimum Age to Participate in Qualified Plan
21

Minimum Years or Service to Participate in Qualified Plan
1 year
Special provision for 2 years if 100% vested immediately

Year of Services
1,000 hours during 12 month period

Ratio Percentage Test for Qualified Plans
Percentage of NHCEs covered must be at least 70% of the percentage of HCEs covered

Average Benefit Test for Qualified Plans
Average benefits for a NHCEs must be at least 70% of the benefits of HCEs

Minimum Participation for Defined Benefit Plans
Must benefit at least 50 employees or the greater of 40% of all employees or two employees (or one if only one employee)

Highly Compensated Employee (HCE)
A more than 5% owner or
An employee earning in excess of $110,000 for the preceding year

Key Employee
If at any time in the year an employee was:
A greater than 5% owner
An officer and compensation greater than $160,000
A greater than 1% owner and compensation greater than $160,000

Top Heavy Plan
More than 60% of aggregate accrued benefits or account balances are allocated to key employees

Top Heavy Defined Benefit Plan Vesting
3-Year Cliff
2-6 Year Graded
100% vested with 2-year eligibility

Non-Top Heavy Defined Benefit Plan Vesting
5-Year Cliff
3-7 Year Graded
100% vested with 2-Year Eligibility

ADP/ACP Testing
0-2% is times 2
2-8% is plus 2

Defined Benefit Plan Integration Permitted Disparity
Lesser of Base Benefit Percentage or 26.25%

Defined Contribution Plan Integration Permitted Disparity
Lesser of Base Benefit Percentage or 5.7%

Section 404c
Employer can only deduct a maximum of 25% of all participants' eligible compensation

Minimum Benefits for Non-Key Employees in Top-Heavy Plans (DB)
At least 2% of compensation x the number of years the plan is top heavy
B is the 2nd letter of the alphabet

Minimum Benefits for Non-Key Employees in Top-Heavy Plans (DC)
At least 3% of compensation
C is the 3rd letter of the alphabet

Maximum Contribution to Traditional IRA
$5,000
Catch-up Age 50+: $1,000
(limited by 100% compensation and under age 70.5)

Deductible IRA Phaseout - One Active Spouse
169 - 179
(contribution for non-active spouse only)

Deductible IRA Phaseout - Active Participants
Single: 56 - 66
Married-jt: 90 - 110

Maximum Contribution for Roth IRA
The lesser of $5,000 or 100% compensation
No age limit

Roth IRA Contriubtion Phaseout - Individuals
107 - 122

Roth IRA Contribution Phaseout - Married-jt
169 - 179

Roth IRA Contribution Phaseout - Married filing Separately
$0 - $10,000

SIMPLE IRA Mandatory Contribution
Matching
$1 / $1 up to 3% of employee compensation
Can elect for not less than 1% in no more than 2 out of 5 years

SIMPLE IRA Mandatory Contribution
Nonelective
2% of compensation whether employee defers or not

Five or Five Power
$5,000 or 5% of the Total Value of the Fund Subject to the Power

Estate Tax Exemption
$5,000,000

Gift Tax Annual Exclusion
$13,000

Maximum Term of CRUT
20 Years

Maximum Term of CRAT
Lifetime or 20 Year Term Certain

Private Foundation Penalty for Not Distributing
15%

Excise Tax for Private Foundation
2%

Annual Gift Limit for Non-citizen Spouse
$136,000

GSTT Tax Rate
Flat 35% in addition to gift and estate taxes