Tax Law Changes : Tax-Year 2006 Businesses

Pick a topic from the list below to learn about the tax changes:

Depreciation and Section 179 Expense

Increased section 179 limits. The maximum section 179 deduction you can elect for property you placed in service in 2006 is increased to $108,000 for qualified section 179 property. This limit is reduced by the amount by which the cost of section 179 property placed in service during the tax year exceeds $430,000.

More information. Publication 946, How to Depreciate Property , has more information on these rules.

Back to top

Self-Employment Tax

The self-employment tax rate on net earnings remains the same for 2006. This rate, 15.3%, is a total of 12.4% for social security (old-age, survivors, and disability insurance) and 2.9% for Medicare (hospital insurance).

The maximum amount subject to the social security part for tax years beginning in 2006 has increased to $94,200. All net earnings of at least $400 are subject to the Medicare part.

Back to top

Social Security and Medicare Taxes

For 2006, the employer and employee will continue to pay:

  1. 6.2% each for social security tax (old-age, survivors, and disability insurance), and
  2. 1.45% each for Medicare tax (hospital insurance).

Wage limits. For social security tax, the maximum amount of 2006 wages subject to the tax has increased to $94,200. For Medicare tax, all covered 2006 wages are subject to the tax. Circular E (Publication 15), Employer's Tax Guide, has more information about these taxes.

Back to top

Standard Mileage Rate

For 2006, the standard mileage rate for the cost of operating your car, van, pickup, or panel truck for your business is 44.5 cents a mile for all business miles driven.

Back to top

April 2016
S M T W T F S
1 2
3 4 5 6 7 8 9
10 11 12 13 14 15 16
17 18 19 20 21 22 23
24 25 26 27 28 29 30

Upcoming Tax Dates

April 11 — Employees who work for tips
If you received $20 or more in tips during March, report them to your employer. You can use Form 4070.

April 12 — Communications and air transportation taxes under the alternative method
Deposit the tax included in amounts billed or tickets sold during the first 15 days of March.

April 14 — Regular method taxes
Deposit the tax for the last 16 days of March.

April 18 — Individuals
File a 2015 income tax return (Form 1040, 1040A, or 1040EZ) and pay any tax due. If you want an automatic 6 month extension of time to file the return, file Form 4868, Application for Automatic Extension of Time To File U.S. Individual Income Tax Return. For more information, see Form 4868. Then, file Form 1040, 1040A, or 1040EZ by October 17.

April 18 — Individuals
If you are not paying your 2016 income tax through withholding (or will not pay in enough tax during the year that way), pay the first installment of your 2016 estimated tax. Use Form 1040ES.

April 18 — Household Employers
If you paid cash wages of $1,900 or more in 2015 to a household employee, you must file Schedule H - Details

April 18 — Partnerships
File a 2015 calendar year return (Form 1065) - Details

April 18 — Partnerships
Electing large partnerships: File a 2015 calendar year return (Form 1065-B) - Details

April 18 — Corporations
Deposit the first installment of estimated income tax for 2016 - Details

April 18 — Social security, Medicare, and withheld income tax
If the monthly deposit rule applies, deposit the tax for payments in March.

April 18 — Nonpayroll withholding
If the monthly deposit rule applies, deposit the tax for payments in March.

April 18 — Household employers
If you paid cash wages of $1,900 or more in 2015 to a household employee, you must file Schedule H (Form 1040). If you are required to file a federal income tax return (Form 1040), file Schedule H (Form 1040) with the return and report any household employment taxes. Report any federal unemployment (FUTA) tax on Schedule H (Form 1040) if you paid total cash wages of $1,000 or more in any calendar quarter of 2014 or 2015 to household employees. Also, report any income tax you withheld for your household employees.

April 27 — Communications and air transportation taxes under the alternative method
Deposit the tax included in amounts billed or tickets sold during the last 16 days of March.

April 29 — Regular method taxes
Deposit the tax for the first 15 days of April.

View More Tax Dates