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December 2005 Newsletter continued |
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EDITOR'S NOTE: Should you have questions with respect to the information contained in this newsletter or need help with your personal or business financial, tax and accounting activities, please call. |
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E-Mail Halliday@hallidaycpa.com |
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This newsletter offers factual and up-to-date information on the subjects discussed, but should not be regarded as a complete analysis of these subjects. No party assumes liability for any loss or damage resulting from reliance or use of this material. |
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Hurricane Katrina Relief |
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Please be aware that congress has passed a bill with various tax breaks for victims and those who help victims from Hurricane Katrina.
People who house Katrina victims for 60 days or more get a tax break. They can deduct $500 for each person they take in, excluding their spouses or dependents, up to a maximum of $2,000 (note: rent cannot be charged to the victims).
Also, the 50%-of-AGI limit on charitable contributions is suspended for any cash donations made after August 27, 2005 but before year end. This applies even to donations made to organizations not involved in Katrina relief efforts. |
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Retirement plans and social security increases for 2006 |
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The 401 (k) maximum rises to $15,000, those born prior to 1957 can contribute an additional $5,000. The SIMPLE maximum remains at $10,000, $12,000 if born before 1957. The pay in ceiling for defined-contribution plans, Keoghs and profit sharing plans is $44,000 for 2006.
Social security benefit checks will be 4.1% larger in 2006. The earnings limits for beneficiaries will rise as well. Individuals between 62 and 65 and eight months can make $12,480. Individuals who will be age 65 and eight months in 2006 can earn $33,240 until they reach that age. There is no cap for individuals over age 65 and eight months. |