| 2006 Tax Rates | Standard Deductions/Personal Exemption | New for 2006 |
Various Adjustments of Tax Numbers for 2006
(Most references to AGI mean modified adjusted gross income for that deduction)
| Maximum Salary Deferrals: | $15,000 for 401(k), 403(b), 501(c), 457 plans; $10,000 for SIMPLE see 'Retirement Plans' for contribution limits for age 50+: (additional $5,00/$2,500 catch-up) |
| Traditional IRA Contributions Limit: | $4,000 (up to amount of earned income for the year)
--additional catch-up $1,000 for age 50+ |
Traditional IRA Contributions Deduction Phaseout: (when also eligible to contribute to a retirement plan at work) |
MFJ, QW: $75,000-$85,000 S, HH: $50,000-$60,000 MFS: 0-$10,000 And when taxpayer not eligible, but spouse covered by a plan: $150,000-$160,000 see 'Retirement Plans' regarding contribution limits |
Roth IRA Contributions Phaseout: |
MFJ: $150,000-$160,000 S, HH: $95,000-$110,000 MFS: 0-$10,000 |
| Social Security: |
Under age 65, can earn up to $11,640 without repaying benefits. Preceding months in year of reaching age 65: $31,080. After reaching age 65, no limit. Benefits reduced $1 every $2 earned over limit. Earnings subject to SS tax: Employee: $94,200 (maximum $5,840) Household help: cash wages over $1,400 |
| Health Savings Account: | Maximum HSA deduction $2,700 individual coverage / $5,450 family coverage. |
| Educational Credit: | Hope Credit: 100% of first $1,100, 50% of next $1,100 tuition (first two years college) Lifetime Learning Credit: 20% of up to $10,000 tuition (any year college+) AGI phaseout: $45,000-$55,000 (S); $90,000-$100,000 (MFJ) |
| Student Loan Interest: | Up to $2,500 AGI phaseout: $105,000-$135,000 (MFJ), $50,000-$65,000 (individual) |
Earned Income Credit: |
Earned income/modified AGI under: One qualifying child: $32,001 ($34,001 MFJ) (maximum credit $2,747) Two qualifying children: $36,348 ($38,348 MFJ) (maximum credit $4,536) Qualifying without child: $12,120 ($14,120 MFJ) (maximum credit $412) (disqualified if investment income over $2,800, any filing status) |
| Adoption Credit | Up to $10,960 (phaseout $164,410-$204,410) |
| 'Kiddie Tax' | Children under 18 with interest/dividends over $1,700 |
| Standard Mileage Rates: |
Business: 44.5¢ (Depreciation conversion: 17¢) Charity: 14¢ (Katrina: 32¢) Medical/Moving: 18¢ |
| Itemized Deduction phaseout: | starts at AGI of $150,500 ($75,250 MFS) |
| Personal Exemption phaseout: | Starts at AGI of: $112,875 MFS $150,500 S $188,150 HH $225,750 MFJ / QW |
| Section 179 Expense: | $108,000; placed-in-service phaseout $430,000 |
| Foreign Income Exclusion: | $82,400 |
| See the original 'NEW TAX LAWS' menu for ongoing changes for this year | |
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| 2006 Tax Rates | Standard Deductions/Personal Exemption | New for 2006 |
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