| Here's a quick review of some of the tax changes you'll see from 2005 to 2006 as a result of inflation adjustments and tax law changes. For details or a discussion of these and other changes that could affect your situation, give us a call.
| | Provision | 2006 | 2005 | | Business equipment expensing deduction | $108,000 | $105,000 | | Total purchase limit for full expensing deduction | $430,000 | $420,000 | | Standard mileage rate for business driving | 44.5 per mile | 40.5 (Jan-Aug)
48.5 (Sep-Dec) | | Mileage rate for medical and moving expense deductions | 18 per mile | 15 (Jan-Aug)
22 (Sep-Dec) | | Adoption credit | $10,960 | $10,630 | | Maximum wages subject to social security tax | $94,200 | $90,000 | | Social security earnings limit | | | | - | Under age 65 | $12,480 | $12,000 | | - | 65 and over | No limit | No limit | | Top estate tax rate | 46% | 47% | | Amount exempt from estate tax | $2 million | $1.5 million | | Annual gift tax exclusion (per donee) | $12,000 | $11,000 | | Maximum retirement plan contributions | | | | - | IRA for those under age 50 | $4,000 | $4,000 | | - | IRA for those 50 and over | $5,000 | $4,500 | | - | SIMPLE plan for those under age 50 | $10,000 | $10,000 | | - | SIMPLE plan for those 50 and over | $12,500 | $12,000 | | - | 401(k) plan for those under age 50 | $15,000 | $14,000 | | - | 401(k) plan for those 50 and over | $20,000 | $18,000 | | "Kiddie tax" threshold | $1,700 | $1,600 | | "Nanny tax" threshold | $1,500 | $1,400 | | Personal exemption | $3,300 | $3,200 | | Standard deduction | | | | - | Single | $5,150 | $5,000 | | - | Joint returns & surviving spouses | $10,300 | $10,000 | | - | Married filing separately | $5,150 | $5,000 | | - | Head of household | $7,550 | $7,300 | | - | Additional for elderly or blind (married) | $1,000 | $1,000 | | - | Additional for elderly or blind (single) | $1,250 | $1,250 |
| This page was last modified on September 20, 2006 11:19 AM |
|