Internal Revenue Update

For those of you who pay income taxes (ha!) there are modest changes you should know about in the Internal Revenue Code for 2005; some are:

The standard deduction for a single person or for a married person filing separately is increased to $5,000 (from $4,850), for head of household, $7,300 (from $7,150), and for a married couple filing jointly, $10,000 (from $9,700). The personal exemption is $3,200 (from $3,100).

For driving expenses you may deduct 40.5¢/mile (from 37.5¢), and medical and moving mileage $0.15/mile (from $0.14). Qualified parking deduction is $200/year (from $195) and commuter highway and vehicle pass is $105/year (from $100). The maximum business equipment deduction is $105,000 (from $102,000).

Roth and traditional IRA annual maximum contributions are $4,000 (from $3,000), through 2007.

The taxable base for social security is now $90,000 (from $87,900). Remember, there is no limit on wages subject to the Medicare tax.
Happy Ides of April!

— Ken Butera

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