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Yerkes & Michels, CPA, LLC
Tax Information
We invite you to utilize our website to extend your knowledge in various areas of tax regulation by visiting our Tax Information page. We will post a short article regarding a topic of tax regulation that is applicable to many taxpayers. The topics will be periodically changed, so check back with us often.
2007 Mileage Rates
The IRS has issued the following mileage rates beginning January 1, 2007:
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48.5 cents per mile for business miles driven
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20 cents per mile for medical or moving purposes
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14 cents per mile in service to a charitable organization
A taxpayer may not use the business standard mileage rate for a vehicle after using any depreciation method under the Modified Accelerated Cost Recovery System (MACRS), after claiming a Section 179 deduction for that vehicle, for any vehicle used for hire or for more than four vehicles used simultaneously. Revenue Procedure 2006-49 contains additional information on these standard mileage rates.
IRA Contribution Limits
The maximum IRA contribution amount for 2006 for an individual under age 50 is $4,000, and for those over age 50 through the year before the taxpayer reaches age 70 1/2 the maximum is $5,000. Phase-out rules may apply if the taxpayer or spouse is an active participant in a retirement plan. The deduction can be made any time up until April 16, 2007.
Charitable Contributions From Your IRA
In August 2006 legislation was passed permitting tax-free distributions directly from your IRA to charitable organizations up to the amount of $100,000 per year. In order to qualify, the taxpayer must be at least age 70 1/2 and the gift must be made directly from the IRA trustee to the charitable organization. The gift qualifies as a minimum required distribution from your IRA. Since there is no income tax to be paid on the distribution, there will be no charitable income tax deduction allowed. It cannot be made through a planned gift vehicle, such as a charitable gift annuity or charitable remainder trust. The provision expires on December 31, 2007.
If you would like additional tax information, you may also visit the IRS online here.
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