Maximizing your performance through effective
financial management & consulting.
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Maximizing your performance through effective financial management & consulting.
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NEWS & ACCOUNTING UPDATES IMPORTANT TAX CHANGES FOR 2006 - Effective January 1, 2006 Ø IRS allowance for mileage has increased for 2005 from $0.405 per mile to $0.445. This should be used for all qualifying, reimbursable mileage allowed up IRS regulations. **Note in the 4th quarter of 2005 the mileage rate increased briefly to $0.485. For more information on 2006 and 2005 mileage reimbursement rates and changes please visit the IRS press release on IRS Mileage Announcements. Ø Maximum gross income for taxable wages for Social Security has increased to $94,200, an increase from 2004 of $90,000. Medicare will continue to have no limit imposed. Ø Tax rates for Social Security and Medicare will remain the same at 6.20% and 1.45%, respectively. The 2006 Federal Unemployment Tax (FUTA) limits will also remain unchanged in from last year at $7,000. To find more about social security and tax facts please visit the Social Security Administration on-line. Ø Colorado state unemployment tax (SUTA) taxable wage base for qualifying employees for 2006 is $10,000.00. Ø 401(k), SEP and 403(b) Contribution maximums have increased for 2006 to $15,000 from $14,000 last year. Catch-up contributions have also increased for those employees over age 50 from $4,000 to $5,000. There is no limit imposed on percentage contribution from compensation on a pre-tax basis as long as you do not exceed IRS limits and payroll taxes are paid. Combined employer/employee pay-in limits for all defined contribution plans are $44,000 up from $42,000 in 2005. Questions on Colorado Use Tax or Sales Tax Rates and License Verification ? To find more information about tax changes or specific business related information, please consultant your tax preparer, visit the IRS and state websites or contact us at (866) 575-0007 : Other valuable business resource links: Colorado Secretary of State - www.sos.state.co Colorado Department of Revenue - www.revenue.state.co.us Colorado Department of Labor & Employment - www.coworkforce.com
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