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  • Casual Articles - Your Gift from the IRS for 2006: New Limits and Contribution Amounts

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    Social Security Wage Base: The new wage base is $94,200 up from $92,000 in 2005.

    Annual Federal Gift Tax Exclusion:

    Generosity increases $1,000 from 2005, with the new 2006 exclusion set at $12,000. In future years, this can again increas

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    Here are some of the changes in contributions and compensation limits that are in place for 2006:

    IRA Contributions:

    For those eligible, the 2006 maximum allowable contribution for a traditional IRA is $4000. This is the same for Roth IRA contributions as well. If you are age 50 or over, the “catch up” amount is an additional $1,000.

    SEP Provisions:

    For plan years beginning in 2006, the maximum compensation limit moves from $210,000 to $220,000

    Maximum SEP Contributions for 2006 increase to $44,000 from $42,000, the limit in 2005.

    Simple IRA Plans:

    The non elective employer contribution wage base is $220,000.

    Contribution limits for an employee remain at $10,000.

    The “catch-up” provision for employees age 50 and over is $2500. This is up $500 from 2005.

    401(k) Contribution Limits:

    For 2006 the elective employee contribution is $15,000. This may also be subject to limitations under an employer plan. The “catch-up” provision is $5,000.

    Social Security Wage Base: The new wage base is $94,200 up from $92,000 in 2005.

    Annual Federal Gift Tax Exclusion:

    Generosity increases $1,000 from 2005, with the new 2006 exclusion set at $12,000. In future years, this can again increase

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    tributions as well. If you are age 50 or over, the “catch up” amount is an additional $1,000.

    SEP Provisions:

    For plan years beginning in 2006, the maximum compensation limit moves from $210,000 to $220,000

    Maximum SEP Contributions for 2006 increase to $44,000 from $42,000, the limit in 2005.

    Simple IRA Plans:

    The non elective employer contribution wage base is $220,000.

    Contribution limits for an employee remain at $10,000.

    The “catch-up” provision for employees age 50 and over is $2500. This is up $500 from 2005.

    401(k) Contribution Limits:

    For 2006 the elective employee contribution is $15,000. This may also be subject to limitations under an employer plan. The “catch-up” provision is $5,000.

    Social Security Wage Base: The new wage base is $94,200 up from $92,000 in 2005.

    Annual Federal Gift Tax Exclusion:

    Generosity increases $1,000 from 2005, with the new 2006 exclusion set at $12,000. In future years, this can again increas

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    2006 increase to $44,000 from $42,000, the limit in 2005.

    Simple IRA Plans:

    The non elective employer contribution wage base is $220,000.

    Contribution limits for an employee remain at $10,000.

    The “catch-up” provision for employees age 50 and over is $2500. This is up $500 from 2005.

    401(k) Contribution Limits:

    For 2006 the elective employee contribution is $15,000. This may also be subject to limitations under an employer plan. The “catch-up” provision is $5,000.

    Social Security Wage Base: The new wage base is $94,200 up from $92,000 in 2005.

    Annual Federal Gift Tax Exclusion:

    Generosity increases $1,000 from 2005, with the new 2006 exclusion set at $12,000. In future years, this can again increas

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    es age 50 and over is $2500. This is up $500 from 2005.

    401(k) Contribution Limits:

    For 2006 the elective employee contribution is $15,000. This may also be subject to limitations under an employer plan. The “catch-up” provision is $5,000.

    Social Security Wage Base: The new wage base is $94,200 up from $92,000 in 2005.

    Annual Federal Gift Tax Exclusion:

    Generosity increases $1,000 from 2005, with the new 2006 exclusion set at $12,000. In future years, this can again increas

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    Social Security Wage Base: The new wage base is $94,200 up from $92,000 in 2005.

    Annual Federal Gift Tax Exclusion:

    Generosity increases $1,000 from 2005, with the new 2006 exclusion set at $12,000. In future years, this can again increase for inflation adjustments but only in $1,000 increments. It probably safe to say we won’t be seeing any increases for a while.

    Federal Estate Tax Exclusion Amount:

    This has moved from $1,500,000 in 2005 to $2,000,000 in 2006 and will remain level through 2008. This is still a hot potato in Washington, and what will eventually happen here is still very much up for grabs.

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