Sarah,
Robby,
Megan, Tonya And
Allison Wish For You
And Your Family A Most Joyful
Christmas And Holiday Season. There Is
No More Appropriate Time To Say
“Thank You” And To Express To Our
Friends, Old And New, Warm Season’s
Greetings And Best Wishes For The
Coming Year. We Encourage You To Be
Especially Mindful of God’s Blessings
DOLLARS
During This Special Season.
Happy SENSE
Holidays! December 2006
Adams & Co., P.C.
Certified Public Accountants
Sarah A. Adams, CPA
E. Robert Adams, Jr., CPA
P.O. Box 880
226 W. Main Street
Lebanon, VA 24266 A publication from
276-889-4950 Fax: 276-889-4449
Adams & Co., PC
Certified Public Accountants
(Located beside the Russell
County Library on
Main Street in Lebanon)
May the star of
Can you itemize? Medical expenses,
Bethlehem shine state income taxes, property taxes, mortgage
brightly on you interest and charitable donations generally
must be greater than standard deduction:
and your family
this Christmas Filing Status ’06 Standard Deduction
season! Head of household $7,550
Married filing joint $10,300
Charitable Contributions Married filing separate $5,150
Health Insuranc e
Single $5,150
Effective for contributions made after August 17, 2006, in New ruling… An S corporation must establish a
corporate plan to provide medical coverage to
order to get credit for cash contributions, the IRS requires the
shareholders (and include as W-2
donor to maintain a bank record or a written receipt from the wages) in order to receive 100% 2006 2007
donee that shows the name of the organization and the date and deductibility, otherwise, it has to
Cars – depreciation limit $2,960 $2,960
amount of the contribution. Write those checks! be taken as a medical deduction on
Trucks – “ “ (except w/ 6’ beds) $3,260 $3,260
Schedule A, Itemized Deductions.
SUV > 6000 lbs. $25,000 $25,000
IRA Contribution $4,000 * $4,000 *
AMT Trap… Caution, many more Simple Plan Contribution $10,000 $10,500
**FARMERS** taxpayers with much lower incomes are caught in the
alternative minimum tax (AMT) trap. Be aware of this 401(k) Contribution $15,000 $15,500
Tobacco Buyout… New VA Law…in extra tax. For tax year 2006, the AMT exemption has Annual Gift Limitation $12,000 $12,000
2006, individuals may exclude 2005 tobacco been increased to $42,500 for single filers and $62,500 Section 179 limits $108,000 $112,000
for married filing joint filers, helping to alleviate this tax FICA Wage limit $94,200 $97,500
buyout income received in 2005.
liability to some degree, but not much.
*Catch-up and over age 50 -- $5000.
Capital Gains rates… 0% and 15% rates
FAST REFUNDS
Filing electronically means you’re likely to get your extended to 2010. Originally set to expire in ENERGY CREDITS & HYBRID VEHICLE
refund if direct deposited into your bank account 2008. Also applies to qualified dividends. Be DEDUCTION.… available for energy-conscious
usually within 7-10 days of the e-file. We’ve been aware that Democratic control may change taxpayers ! Call for more info!
providing E-file services since 2000. Starting
the tax environment soon. “A person doesn’t know
1/1/07, refunds can be split and deposited to 2 or IRS how much he has to be
3 bank accounts. Expired laws in 2005: Educator’s deduction, tuition Installment thankful for until he
Telephone Excise Tax – refunds available for 2006 deduction, sales tax deduction. Legislation pending! agreement has to pay taxes on it.”
user fees increase from Ann Landers
thru tax credit on 1040. Keep up with those miles… $43 to $105 1/1/07.
the IRS has issued new Standard Mileage Rates for ‘06/’07
Minimum wage – start budgeting now for an 2006 2007 WEBSITES: General rule--defer income to
increase in 2007. Business 44.5¢ 48.5¢
2007, and pay expenses in 2006 to
www.adamscpas.com get early deductions. Be aware of
Charity 14¢ 14¢ www.irs.gov AMT trap and limitations of
S Corporation Issues – The entity of choice for Medical 18¢ 20¢
www.tax.virginia.gov itemized deductions.
many new corporations, but also audited more
Outgrowing your accounting system ? We are
often. Biggest audit issue…officers must receive
Long Term Care Insurance now Sage business consultants (MAS90, MAS200,
a salary (W-2 wages) for services performed. Peachtree Quantum). See www.sagesoftware.com
In Virginia, individuals may be eligible for a 15%
credit of the cost of the long-term care insurance for more details.
Call Sarah for QuickBooks sales, training and premiums on newly purchased policies. The credit
support --- easy and affordable. Feel free to share this newsletter with
may not be claimed in the same year that a federal
or Virginia deduction is claimed for the premiums. family, friends and colleagues!