Use current numbers for your 2006 tax planning
Use current numbers for your 2006 tax planning
Every year the IRS adjusts tax numbers due to inflation. Additional changes come from governmental tax law revisions. As you begin your tax planning for the current year, here are some of the changes you’ll need to take into account.
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The Top estate tax rate decreases to 46% and the exemption amount increases to $2 million for 2006.
- The annual gift tax exclusion increases to $12,000 per donee
- The Maximum earnings subject to social security tax increases to $94,200 for 2006. As always, all earned income (wages and self-employment income) is subject to Medicare tax.
- The first-year equipment expensing limit increases to $108,000. A special limit applies to sport utility vehicles: when purchased for business use, no more than $25,000 may be expensed in the first year.
- The standard mileage rate for business driving in 2006 will be 44.5¢ per mile, and the mileage rate for medical and moving expenses will be 18¢ a mile.
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Written by Ben Lawler, CPA
CEO & President of ProActive Advisors, Inc.