 |
What's New in 2006 |
|
What's New in 2006 |
|
|
|
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 |
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-
|
Head of household | $7,550 | $7,300 |
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-
|
Additional for elderly or blind (married) | $1,000 | $1,000 |
|
-
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Additional for elderly or blind (single) | $1,250 | $1,250 |