Please contact our office if you would like a performance review for your company. This can help you comp[are your business to other firms in the same industry and similar sales. Everyone likes to benchmark themselves and this report will do that for your business.
More and more of our clients are being subjected to alternative minimum tax. For 2006 it would be appropriate to bring in a cancelled check stub and let’s see if we can avoid this tax in 2006. The estimates are that an even greater amount of taxpayers will be hit with this additional tax in 2006, so let’s plan for it please!
Beginning Jan. 1, 2006, the standard mileage rates for the use of a car (including vans, pickups or panel trucks) will be:
44.5 cents per mile for business miles driven;
18 cents per mile driven for medical or moving purposes; and
14 cents per mile driven in service of charitable organizations, other than activities related to Hurricane Katrina relief.
The 8.25% individual tax rate was supposed to expire at the end of 2005 but it isn’t going to do so. This rate has been extended until the end of 2007. Supposedly, the rate will go back down on January 1,2008, however I suspect it will stay up. Unless the lottery is really really sucessful and maybe then the state won’t keep running out of money.
Speaking of the lottery, winnings from the lottery will be subject to a 7% withholding by the NC State Lottery Commission in order to pay the state personal income tax.
Don’t worry, we don’t have the highest state tax rate. Anyone know which state does?
-Robin
Just thought y’all might need to know next year’s info…
The Social Security wage base limit for 2006 is $94,200. The rate remains at 6.2%. The 2006 maximum tax is $5840.40
Medicare tax remains taxable for all wages at 1.45%.
We are not spending huge amounts of our planning time and resources on the proposed tax legislation, primarily because we do not think the real estate lobbies will allow this legislation to pass in its current form. It would have a severe negative impact on real estate sales if it passed. We are seeing many more clients hit with the Alternative Minimum Tax, which is a problem. However, we do not think the current proposed legislation is a realistic solution.
When the legislation enters its final stages we will work to incorporate the changes into our tax planning for the year.
Our blog is now online. Yay!