Know It All
Mileage Rates
2006
| Business Mileage Rate | .445 per mile |
| Charitable Mileage | .14 per mile |
| Medical & Moving Mileage | .18 per mile |
2005
| Business Mileage Rate | .405 per mile |
| Charitable Mileage | .14 per mile |
| Medical & Moving Mileage | .15 per mile |
Pension Limits
The maximum exclusion for elective deferrals for a 401(K)
Plan, a 403(B), and 457(E),
a SARSEP is increased from $14,000 to $15,000 in 2006.
Simple Retirement Accounts 408(P) remains the same for 2006 at $10,000.
Catch-up contributions for individuals aged 50 or over is
increased from
$3,000 to $4,000 in 2005 for 401(K), 403(B), and 457(E) plans.
Catch-up contributions for a 408(P), Simple Plan has increased from $2,000 to $2,500 in 2006.
Social Security Wage Base for 2006
The maximum earnings subject to FICA withholding increases to
94,200 for 2006. Beginning in 2006, individuals who
are under full
retirement age can earn up to $12,480 per year, ($1,040 per month) before losing
benefits.
The year the individual reaches full retirement age
(age 65
and six months for retirees born in 1940; age 65 and eight months for retirees
born in 1941),
the earnings limit is $33,240 ($2,770 per month).
There is
no limit on earnings beginning the month the individual attains full retirement
age.
2005 Daycare Meal Allowance (WI)
| Breakfast | $1.04 |
| Lunch & Dinner | $1.92 |
| Snack | $0.57 |
Lifetime Learning Credit
The maximum credit for Lifetime Learning Credit remains the
same for 2005. The credit per taxpayer is equal to 20% up to $10,000
of
qualifying higher education expenses with a maximum credit of $2,000.
Childcare Credit
The childcare credit has remained the same for 2005 at $3,000 for one
qualifying individual or up to $6,000 for two or more qualifying individuals.
The maximum credit is $1,050 for one qualifying individual and $2,100 for two or
more qualifying individuals.
Per Diem for Travel Away From Home
Per diem for travel away from home has been increased, effective January 1, 2005.
Under the high-low substantiation method, the per diem rate
for high cost localities is $204, with the federal M&IE rate treated as $46.
The per diem rate for low cost localities is $129, with the federal M&IE rate
treated as $36.
For individuals in the transportation industry, the federal M&IE rate for travel within the United States is $41 for October 10, 2004 to September 30, 2005 and $52 from October 1, 2005 to the present.
Depreciations Limits for Luxury Autos, Vans, Light Trucks, & Electric Passenger Autos
2005 Maximum Depreciation Deduction--Based on 100% Business Use
The depreciation deduction, including the Section 179 deduction and Liberty Zone depreciation allowance is limited by annual caps. Determine the maximum depreciation deduction based on the date the auto is placed in service. If business or investment use is less than 100%, reduce the maximum deduction amount proportionately.
| Passenger Autos | Trucks and Vans | Electric Passenger Autos | |
| Year 1 | $ 2,960 | $ 3,260 | $ 8,880 |
| Year 2 | 4,700 | 5,200 | 14,200 |
| Year 3 | 2,850 | 3,150 | 8,450 |
| Year 4 | 1,675 | 1,875 | 5,125 |
| Year 5 | 1,675 | 1,875 | 5,125 |
| Year 6 | 1,675 | 1,875 | 5,125 |
Section 179 Expensing
|
|
2005 | 2006 |
| Deduction limit | $105,000 | $108,000 |
| Qualifying property limit | $420,000 | $430,000 |
| Limit on SUV | $25,000 | $25,000 |
Self Employed Health Insurance
Self-employed individuals are allowed a deduction of 100% of their health insurance premiums paid for a plan established under their sole proprietorship. This also applies to partners and S corporation shareholders.