The number of students qualifying for gifted kindergarten programs in New York City public school districts rose by 10 percent this year, and those qualifying for the elite citywide program jumped by a third, raising the possibility that parents and their children have begun to master an admission process that was retooled three years ago.
According to figures released Friday by the Department of Education, the spike in students eligible for gifted programs occurred despite a 16 percent drop in the number who took the exams. The city described the decrease as a “leveling off” after an increase in test-takers last year, which they attributed to a publicity campaign.
Of the 12,454 in New York City who took the test this winter, 3,542 (or 26 percent) scored at or above the national 90th percentile, up from 3,231 the year before, qualifying them for one of the 70 gifted kindergarten programs spread through the city’s school districts. But the most striking increase occurred in the number of children scoring at or above the national 97th percentile: 1,788, up from 1,345 last year. Those students qualify for one of the five citywide gifted programs, which have only about 300 seats in all, meaning the competition for them this year will be even fiercer.
Already, the bar for admission to at least one of the citywide programs, the Anderson School on the Upper West Side, has been raised to the 99th percentile for most of its 50 seats. Almost 300 parents whose children scored that high attended recent daytime tours.
Anna Lewiston of the Upper East Side was determined to send her daughter, Lena, to Anderson but was told that the girl’s 97th-percentile score would not make the cut. Lena will go to a private school. “It’s really too much pressure for preschoolers,” Ms. Lewiston said of the test.
Another citywide program, the Brooklyn School of Inquiry in Gravesend, allowed 540 parents on tours before turning others away. The principal, Donna Taylor, said she noticed growing anxiety among them when they saw the odds of getting one of her 56 slots.
“It’s heartbreaking,” she said. Children who are not selected for citywide programs are eligible for district-based gifted programs; students may also enroll in regular kindergarten classes at their neighborhood schools.
The cause of the higher passing rates was not clear, but increased preparation might have been a factor. Hundreds of parents hired tutors or bought commercial test preparation materials before taking this year’s test, a mixture of the Otis-Lennon School Ability Test, a reasoning exam, and the Bracken School Readiness Assessment.
At the Perry School, a preschool in the West Village, children spent an hour a day in a “think tank program” designed to expose them to the reasoning and materials they would see during the test. They also had professional tutoring. Of the five students who took the gifted exam, “we got two 99s, a 98, and two 97s,” said Dawn Ifrah, the founder.
Bright Kids NYC, the tutoring company that worked with those children, reported that 80 percent of the 120 children for whom it had results had scored over the 90th percentile, and 60 children had scored in the 99th.
Department of Education officials acknowledged that preparation may have played a role but said they were confident that most children who passed belonged in accelerated classes. They added that the city was trying to increase the number of full-day preschools in poor, black and Hispanic neighborhoods, which are underrepresented in the gifted programs.
Anna Commitante, who heads the gifted and talented program, said the city “may very well think about something different” after next year, when its contract with testing companies expires. But officials later said no policy change was under consideration.
Susan K. Johnsen, the president of the Association for the Gifted, a division of the Council for Exceptional Children, recommends the use of many measures to assess giftedness, like observation, recommendations and student work, not simply tests. “Any test is susceptible to test preparation, and that’s why you start to invalidate those assessments,” Dr. Johnsen said.
The increase in high-scoring students was concentrated in the middle- and upper-middle-class districts of Manhattan and Queens. In the Bronx, fewer students qualified this year.
In District 3, which includes the Upper West Side, 455 children, a full 47 percent of those who took the test, scored at or over the 90th percentile, and 250 scored at or over the 97th, compared with 218 last year. In Manhattan’s District 2, 44 percent of the test-takers qualified, and 341 pupils got top scores, a 42 percent increase.
In the past, the city’s 32 school districts used diverse criteria for gifted admission, but the city made the test the sole factor in 2008, in part to address allegations of favoritism and the overrepresentation of white children in the programs. Yet nearly 70 percent of students in the programs are white or Asian, the reverse of the racial composition of the school system as a whole.
Monday, June 21, 2010
Monday, June 14, 2010
How the New Wealth Taxes Will Hit You
We will soon be paying a lot more taxes. According to the new health-care bill that Congress passed in March, new taxes will have to be paid: an extra .9% tax on wages for couples earning more than $250,000 ($200,000 for singles) and a new 3.8% tax on investment income.
What it means for us, ordinary people is that our earnings will be taxes more. For workers, the extra 0.9% levy puts a progressive element in what used to be a totally flat tax. The 3.8% tax on investment income also knocks down a longstanding wall by applying a "payroll" tax to unearned income. Until now, FICA taxes for Social Security and Medicare have applied only to wages, not investment income.
While many details remain unclear and the Internal Revenue Service hasn't issued any guidance, here are preliminary answers to the most important questions taxpayers are asking.
These taxes take effect in 2013, two elections away. Might they be repealed first?
Not likely. "Congress would have to undo the health reform, and budget constraints would still be there," says Clint Stretch of Deloitte Tax. "Even if Republicans take control of Congress, President Obama holds the veto pen until Jan. 20, 2013."
How does the 0.9% tax work?
If Mark and Victoria each earn $175,000, their total employment income is $350,000. Currently they owe 1.45%—$5,075—of regular Medicare tax, and their employers owe a matching amount. In 2013, the couple will owe an extra 0.9%—$900—on their wages above $250,000, which is $100,000. Their employers pay nothing extra.
What about the 3.8% tax on net investment income?
This levy is keyed to "modified adjusted gross income," with a threshold of $250,000 for couples and $200,000 for singles. (This is simply adjusted gross income for nearly everybody except expatriates, who must add back certain exclusions.) The tax is a flat 3.8% on investment income above the threshold.
How would this work?
Example 1: Mark and Victoria, a married couple, have $400,000 of AGI—$200,000 of wages plus $200,000 of investment income. Because they have $150,000 of investment income above the $250,000 threshold, they would owe an extra $5,700.
Example 2: Anne, a single filer, earns $40,000 but has an investment windfall of $190,000, for total income of $230,000. Because she has investment income of $30,000 above her $200,000 threshold, she would owe $1,140 of additional tax.
Example 3: Retirees Mary and Bill have no wages but they do have a taxable IRA payout of $90,000, plus investment income of $150,000, for a total of $240,000. They don't owe the new tax, because they have no investment income above the $250,000 threshold.
What is investment income?
Interest, except municipal-bond interest; dividends; rents; royalties; and capital gains on the sales of financial instruments like stocks and bonds. The taxable portion of insurance annuity payouts also counts, unless it is from a company pension. So do gains from financial trading, as well as passive income from rents and businesses you don't participate in. All are subject to the 3.8% tax on amounts above the $250,000 or $200,000 threshold, as described above.
Not taxed: Distributions from regular and Roth IRAs and other retirement accounts, including pensions and Social Security, and annuities that are part of a retirement plan. Life-insurance proceeds, muni-bond interest and veterans' benefits don't count, nor does income from a business you participate in, such as a Subchapter S or partnership.
Could the 3.8% tax apply to gains on the sale of a home?
Yes, if there is a taxable gain above the $500,000 ($250,000, single) exclusion for gains on the sale of your residence.
Example: John and Jill, who bought their home in a New York suburb for $50,000 in 1972, sell it in 2013 for $1 million. After subtracting the $50,000 cost and $500,000 exclusion, they have investment income of $450,000. If they also have a taxable IRA payout of $70,000 and a pension of $30,000, they would owe the tax of $11,400 on $300,000.
What happens if a taxpayer who owes the new tax on investments also has a large itemized deduction—say, medical expenses or a theft loss?
Even if taxable income is zero because of deductions, he or she could still owe the 3.8% tax. Example: Myra is a single filer with investment income of $100,000 and wages of $200,000. But during the same year she loses $300,000 in a Ponzi scheme. She pays no income tax, but she still owes the new Medicare tax of $3,800 on her net investment income, says Sharon Kreider, a tax expert in Sunnyvale, Calif.
Does the 3.8% tax affect trusts and estates?
Yes, and it can hit them hard. The tax is levied on investment income as low as $12,000 that isn't paid out to beneficiaries. Some believe the tax may also hit children's unearned income subject to the "kiddie tax" if the parents owe it themselves.
What steps would Law Office of Inna Fershteyn recommend to minimize these taxes, other than taking capital gains before 2013 or buying municipal bonds?
• Examine both your regular and investment income: the higher your regular AGI, the more likely that your investment income will be subject to the new tax. So while Social Security and pensions don't count as investment income, they raise AGI. This makes Roth IRA conversions even more attractive for many. "Roth withdrawals don't raise AGI and aren't investment income," says Vern Hoven, a tax expert in Gig Harbor, Wash.
• Reconsider a defined-benefit pension if you're eligible. Pension payouts don't count as investment income, and the older a taxpayer is, the more he can contribute.
• Taxpayers selling assets should consider installment sales,if spreading out the income would minimize the new tax.
• For some, life insurance may become more attractive. Because life-insurance proceeds at death aren't subject to this tax, a taxpayer could buy a policy, borrow from it and settle up at death, avoiding income tax on investment gains within the policy. But Mr. Nash cautions that the savings must outweigh the fees and other disadvantages such policies may have.
What it means for us, ordinary people is that our earnings will be taxes more. For workers, the extra 0.9% levy puts a progressive element in what used to be a totally flat tax. The 3.8% tax on investment income also knocks down a longstanding wall by applying a "payroll" tax to unearned income. Until now, FICA taxes for Social Security and Medicare have applied only to wages, not investment income.
While many details remain unclear and the Internal Revenue Service hasn't issued any guidance, here are preliminary answers to the most important questions taxpayers are asking.
These taxes take effect in 2013, two elections away. Might they be repealed first?
Not likely. "Congress would have to undo the health reform, and budget constraints would still be there," says Clint Stretch of Deloitte Tax. "Even if Republicans take control of Congress, President Obama holds the veto pen until Jan. 20, 2013."
How does the 0.9% tax work?
If Mark and Victoria each earn $175,000, their total employment income is $350,000. Currently they owe 1.45%—$5,075—of regular Medicare tax, and their employers owe a matching amount. In 2013, the couple will owe an extra 0.9%—$900—on their wages above $250,000, which is $100,000. Their employers pay nothing extra.
What about the 3.8% tax on net investment income?
This levy is keyed to "modified adjusted gross income," with a threshold of $250,000 for couples and $200,000 for singles. (This is simply adjusted gross income for nearly everybody except expatriates, who must add back certain exclusions.) The tax is a flat 3.8% on investment income above the threshold.
How would this work?
Example 1: Mark and Victoria, a married couple, have $400,000 of AGI—$200,000 of wages plus $200,000 of investment income. Because they have $150,000 of investment income above the $250,000 threshold, they would owe an extra $5,700.
Example 2: Anne, a single filer, earns $40,000 but has an investment windfall of $190,000, for total income of $230,000. Because she has investment income of $30,000 above her $200,000 threshold, she would owe $1,140 of additional tax.
Example 3: Retirees Mary and Bill have no wages but they do have a taxable IRA payout of $90,000, plus investment income of $150,000, for a total of $240,000. They don't owe the new tax, because they have no investment income above the $250,000 threshold.
What is investment income?
Interest, except municipal-bond interest; dividends; rents; royalties; and capital gains on the sales of financial instruments like stocks and bonds. The taxable portion of insurance annuity payouts also counts, unless it is from a company pension. So do gains from financial trading, as well as passive income from rents and businesses you don't participate in. All are subject to the 3.8% tax on amounts above the $250,000 or $200,000 threshold, as described above.
Not taxed: Distributions from regular and Roth IRAs and other retirement accounts, including pensions and Social Security, and annuities that are part of a retirement plan. Life-insurance proceeds, muni-bond interest and veterans' benefits don't count, nor does income from a business you participate in, such as a Subchapter S or partnership.
Could the 3.8% tax apply to gains on the sale of a home?
Yes, if there is a taxable gain above the $500,000 ($250,000, single) exclusion for gains on the sale of your residence.
Example: John and Jill, who bought their home in a New York suburb for $50,000 in 1972, sell it in 2013 for $1 million. After subtracting the $50,000 cost and $500,000 exclusion, they have investment income of $450,000. If they also have a taxable IRA payout of $70,000 and a pension of $30,000, they would owe the tax of $11,400 on $300,000.
What happens if a taxpayer who owes the new tax on investments also has a large itemized deduction—say, medical expenses or a theft loss?
Even if taxable income is zero because of deductions, he or she could still owe the 3.8% tax. Example: Myra is a single filer with investment income of $100,000 and wages of $200,000. But during the same year she loses $300,000 in a Ponzi scheme. She pays no income tax, but she still owes the new Medicare tax of $3,800 on her net investment income, says Sharon Kreider, a tax expert in Sunnyvale, Calif.
Does the 3.8% tax affect trusts and estates?
Yes, and it can hit them hard. The tax is levied on investment income as low as $12,000 that isn't paid out to beneficiaries. Some believe the tax may also hit children's unearned income subject to the "kiddie tax" if the parents owe it themselves.
What steps would Law Office of Inna Fershteyn recommend to minimize these taxes, other than taking capital gains before 2013 or buying municipal bonds?
• Examine both your regular and investment income: the higher your regular AGI, the more likely that your investment income will be subject to the new tax. So while Social Security and pensions don't count as investment income, they raise AGI. This makes Roth IRA conversions even more attractive for many. "Roth withdrawals don't raise AGI and aren't investment income," says Vern Hoven, a tax expert in Gig Harbor, Wash.
• Reconsider a defined-benefit pension if you're eligible. Pension payouts don't count as investment income, and the older a taxpayer is, the more he can contribute.
• Taxpayers selling assets should consider installment sales,if spreading out the income would minimize the new tax.
• For some, life insurance may become more attractive. Because life-insurance proceeds at death aren't subject to this tax, a taxpayer could buy a policy, borrow from it and settle up at death, avoiding income tax on investment gains within the policy. But Mr. Nash cautions that the savings must outweigh the fees and other disadvantages such policies may have.
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