Welcome to my blog. This will be the first of many periodic posts that aim to pass along pertinent information related to tax and accounting issues that seem applicable to a large number of individuals and businesses. I will do my best to keep these short and to the point.
Since this is the start of 2016, I thought I would start off by passing along the updated “tax facts” for the year. Please bear in mind that these numbers aren’t set in stone. The IRS has a history of changing some numbers during the course of the year, for example, the mileage reimbursement deduction. I will post any changes as they arise. For now:
Social Security
- Social Security Wage Base: $118,500 Rate: 6.2%
- Medicare Wage Base: Unlimited Rate: 1.45%
- plus an additional 0.9% for Married Joint over $250,000 and Single over $200,000
Retirement Plans
- 401(k) maximum elective salary deferral: $18,000 or $24,000 if born before 1966
- SEP-IRA, Profit-sharing, Keogh, etc. maximum contribution amount: $53,000
- IRA maximum contribution $5,500 or $6,500 if born before 1966
Estate & Gift Tax
- Annual gift exclusion: $14,000
- Federal estate and gift tax exclusion: $5,450,000
Deductions
- Auto mileage rate for business: 54 cents a mile
- Auto mileage rate for charity: 14 cents a mile
- Auto mileage rate for medical or moving: 19 cents a mile