2007 and 2008 Annual limits and rates for Fica tax, Social Security tax, maximum pension & 401K deductions contributions, reimbursed mileage rate, depreciation, self-employed heath, insurance deduction, gift tax and corporate tax rates. QuickBooks help and training for small business. QuickBooks help and training for small business.
 

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Payroll tax Social Security Fica and Futa Limit

 
 

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FICA Tax (941 Tax) limit  - Fica Limit

Social Security tax includes FICA 6.2% and Medicare 1.45%. The FICA tax limit (Social Security) changes annually. The Medicare tax has no limit.  Employer FICA tax and Employee FICA have the same limits. Both FICA tax rate (6.2%)  and Medicare tax rate (1.45%) as a rule do not change. In addition to FICA tax limit and Social Security Limit, other tax limits and tax rate (s) can be found on this webpage.

2007 Medicare Wage Base limit         


2007 Social Security Wage Base limit
2008 Social Security Wage Base limit

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Unlimited


$97,500   2007
$102,000 2008

Wow...Just 5 years ago the limit was $87,000!

FUTA Tax (940) limit

2007 Federal Unemployment limit

$   7,000

Shortcuts, tips, resources  for payroll taxes and human resources

QuickBooks Payroll

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2007 Mileage Rate

For deducting or reimbursing 2007 business mileage on a personally owned vehicle
2008 business mileage 


Interesting article on what auto expense is deductible
2007 Mileage- Business rate
$ .485 per mile (2007) 48.5 cents
$ .505 per mile (2008)
50.5 cents
2007 Mileage -Charity rate
$ .14  per mile   (2007) 14 cents
$ .14  per mile   (2008)
14 cents
2007 Milage -Medical and Moving Rate
$  .20 per mile   (2007) 20 cents
$ .19  per mile   (2008)
19 cents

 Payroll tax rules Part A  and Part B  for employees or owners using a company vehicle

2006 rates and limits - Social Security, Mileage, Pension, 401K, IRA
2005 rates and limits - Social Security, Mileage, Pension, 401K, IRA

2004 rates and limits - Social Security, Mileage, Pension, 401K, IRA
2003 rates and limits - Social Security, Mileage, Pension, 401K, IRA

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2007 Maximum contributions and limits to pensions, IRA, and 401 K

Click here for official source for:  
  
2007 limitations

Choosing a retirement plan

2007 Maximum employee 401K contribution limit
 




2007 $15,500 +$5,000 (over age 50)
2008 $15,500 +$5,000 (over age 50)

2007 Catch up contribution Limit  (over age 50)

 

$ 5,000  (2007  and 2008)
 included in above

 

2007 Employer contribution to 401K is limited          

2007 total additions (employer contribution plus employee contribution) cannot exceed lesser of :
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Up to 25% of compensation

2007:
$45,000  or 100 % of compensation.
 2008
$46,000  or 100 % of compensation.
 

2007 Maximum Annual Compensation limits  for determining benefits or contributions under  a qualified plan  (401(a)(17), 404(l), 408(k)(3)(C), & 408(k)(6)(D)

Note: for 2007 definition of a key employee in a top-heavy plan is  $145,000
       for
 (2008) definition of a key employee in a top heavy plan is $150,000

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$  225,000   (2007)
$  230,000    (2008)


 

2007 Maximum Annual Defined Contribution- Employer Contributions for 2007 to an employee SEP-IRA cannot exceed the lesser of  the following amounts:

2007 Simplified Employee Pension
Employers contribution for employees is  based on the  plan document, which cannot be more restrictive than including all employees who performed services for the employer in the last 3 of 5 years with earnings greater than:

Employees covered under collective bargaining employees & certain nonresident aliens may also be exclude.

Special rules apply to the self-employed. See publication 560 (www.irs.gov) for a worksheet on how to calculate a 2007 SEP contribution for a self employed Schedule C Filer.  For the  worksheet, click here.

Learn more- The ABCs of SEP Plans
Checklist- are you in compliance with IRS SEP rules and regs? Pdf


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25% of the employee's W2 compensation (up to $220,000)
         or
$   45,000   (2007)
$   46,000   (2008)
 

     $500 for 2007 and 2008
    
  

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2007 Simple Retirement Account (Simple IRA)
Maximum Pretax Employee contribution
Learn more- The ABCs of Simple Plans
Checklist- are you in compliance with IRS Simple rules and regs? Pdf



$     10,500     (2007 and 2008)
    + over age 50 catch up

  

The employer contributes up to 3% of W2 wages which is in addition to the Employee deferral max above (Maximum ER contribution is $10,500)

2007 Simple Catch up Deferral (over age 50)

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$   2,500
      

2007 Limit to  Traditional IRA, nondeductible IRA, or Roth IRA.   
 Who can contribute





$    4,000 + over age 50 catch up
$    5.000 in 2008
    

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IRA Catch up Deferral (over age 50)

$     1000  in 2007 and 2008

Learn about small business pensions

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How retirement income is taxed (pdf)

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2007 Maximum Earnings for Retirees

2007 Maximum retirement earnings before Social Security benefits are reduced
(One dollar in benefits will be withheld for every $2 in earnings above the limit).
2008 Maximum
 

over age 65


2007 under age 65 reduction begins
2008 under age 65 reduction begins

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unlimited earnings permitted - no reduction

earnings over $ 12,960 ($1080/mo)
earnings over $ 13,560 ($1130/mo)
In the year the individual reaches full retirement age, earnings  months prior to attaining full retirement age - One dollar in benefits will be withheld for every $3 in earnings above the limit of $34,440 (2007)   $36,120 (2008)

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Minimum Wage hourly rates

Link to a chart of all States Minimum Wage rates
Federal minimum wage 

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2007 Corporation and Individual Tax Rates

Individual Rates   original 2007 source
  • $ 5,350  2007 Standard deduction for  Single

  • $ 5,350  2007 Standard deduction for Married filing separately

  • $ 7,850  2007 Standard deduction for Head of household

  • $10,700 2007 Standard deduction for Married filing Joint

  • 850 2007 Taxpayer claimed as a dependent

Exemption amount $3,400 
Deduction for personal exemption phase out begins
Single $156,400-278,900  
Married $234,600-$357,100 
HOH $195,500-$318,000
           

Deduction for itemized deductions phase out begins when
AGI Threshold
Married, Single, HOH   $156,400
Married Filing Separate    $78,200

Individual Rates    original 2008 source     

  • $ 5,450  2008 Standard deduction for  Single

  • $ 5,450  2008 Standard deduction for Married filing separately

  • $ 8,000  2008 Standard deduction for Head of household

  • $10,900 2008 Standard deduction for Married filing Joint

Exemption amount $3,500 
Deduction for personal exemption phase out begins
Single $159,950-282,450
 
Married $239,950-$362,450 
HOH $199,950-$322,450
           

Deduction for itemized deductions phase out begins when
AGI Threshold
Married, Single, HOH   $159,950
Married Filing Separate    $79,975

             

Click here to view IRS website containing these rates

For tax forms and extensions to file individual tax returns click here

2007 Tax Rates

2007 Individual Tax  Rates 10% 15% 25% 28% 33% 35%

Single

7,825
 
next  24,025
to 31,850
next 45,250 
to 77.100
next 83,750
to 160,850
next 188,850
to 349,700
amounts over
 349,700

Head Of Household

11,200
 

next 31,450
to 42,650
next 67,450
 to 110,100
next 68,250
to 178,350
next 171,350 to 349,700 amounts over
349,700

Married Joint

15,650
 

next 48,050
to 63,700
next 64,800
 to 128,500
next 67,350
to 195,850
next 153,850 to 349,700 amounts over
 349,700

2008 Tax Rates

2008 Individual Tax  Rates 10% 15% 25% 28% 33% 35%

Single

8,025
 
next  24,52q
to 32,550
next 46,300 to 78.850 next 85,700
to 164,550
next 193,150
to 357,700
amounts over
 357,700

Head Of Household

11,450
 

next 32,200
to 43,650
next 69,000
 to 112,650
next 69,750
to 182,400
next 175,300 to 357,700 amounts over
357,700

Married Joint

16,050

next 49,050
to 65,100
next 66,350
 to 131,450
next 68,850
to 200,300
next 157,400 to 357,700 amounts over
 357,700

 

 

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Gift Tax

 
Federal gift tax exclusion-
click on annual exclusion
 

2006-2008 Estate Tax Applicable Exclusion Amount
 

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$    12,000
    


$2,000,000

 

 

  Self Employed Health Insurance Deduction

 
Deductible Percentage for 2007 health insurance premiums    100%
   (2002=70% 2003=100% 2004=100% 2005=100% 2006=100%)

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Health Savings Accounts (HSA)

 
High Deductible Health Plan and Contribution Limits
    Maximum Annual Deductible Annual out-of- pocket does not exceed

2007 Self -only coverage annual deductible

$1,100-$2,850 $5,500

2007 Family coverage annual deductible

$2,200-$5,650 $11,000

Monthly Limit on deductions is 1/12 of the lesser of the annual deductible or the maximum annual contribution ($2,850 Self or $5,650 Family) (For tax year  2008 -$2,900 Self or $5,850 Family)
Catch Up Contributions  for individuals over 55 is $800  Source

 
Learn more about Health Savings Accounts and administrative requirements  

Travel Reimbursement Rules for Lodging, Meals & Incidental Expenses

 
See Revenue Ruling for details on flat rate reimbursement plans

Meals while away on business
50% deductible
 

 

 
Depreciation

2007 Section 179 depreciation $125,000

The amount of investment qualifying for this immediate deduction begins to phase out for small businesses with investment in excess of $500,000 

2008 Section 179 depreciation $250,000

The amount of investment qualifying for this immediate deduction begins to phase out for small businesses with investment in excess of $800,000 

Regs now permit Section 179 on off-the-shelf software

Leasehold property placed in service before 1/1/2006 - 15 year SL
(subsequent owners of the leasehold property required to depreciate over 39 Years)

Elect to deduct $5000 start-up & $5000 organizational expenses in the year the business begins.
Effective for expenses incurred after 10/22/04. Be sure to read more on the details of this rule.
Deductions reduced by the amount of which the cumulative cost of start-up or organizational expenditures exceed $50,000 respectively

 Luxury Auto depreciation rules:
A car is defined as a four-wheel passenger automobile designed for use on public roads and is rated at 6,000 pounds or less unloaded gross vehicle weight 1st year depreciation limit
 this site has not yet been updated
Special use vehicles (over 6000lbs loaded) now exempt from luxury auto rules and can be deducted under section 179 SUVs (over 6000lbs)
 

Heavy Trucks & Vans

  read more

$25,000 including any sec 179 deduction




$108,000 including any sec 179 deduction

Publication 946 has a nice table for limits on depreciation of vehicles

The 50% and 30% bonus depreciation options expired December 31, 2004.

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Statute of Limitations

3 years from tax period due date or 3 years from date original return received whichever is later
unless the taxpayer fails to include on a return any information with respect to a listed transaction
then the statute of limitations will not expire before 1 year after the Secretary is furnished with the information.
See more Statute of Limitations guidelines
see also
How long should you retain your receipts and business documents
 

Tax Tips from the IRS

 

    Click to view tax tips at www.IRS.Gov

 
IRS Circular 230 Disclosure: To ensure compliance with requirements imposed by the IRS, we inform you that, any U.S. federal tax advice contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding any tax related penalties that may be imposed on you or any other person under the Internal Revenue Code or (ii) promoting, marketing, or recommending to another party any transaction or matter addressed in this communication

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