As you may have read, the IRS lost
approximately 30,000 estimated tax
payments on September 11, 2005. If
you were one of the “lucky” ones to
have your 3rd quarter estimate tax
payments lost in the San Francisco
Bay by a courier for the IRS you may
have received a letter from the IRS.
If your check has never cleared and
you did not receive a notice please
let us know.
Required minimum distributions from
retirement plans must be made by
December 31. If you haven’t already
done so, you should contact your
broker to make sure the minimum
amount will be distributed to you
before December 31.
It is no longer imperative that the
designated beneficiary of a
retirement plan be chosen by the
required beginning date. The
beneficiary can now be changed at
any time during the lifetime of the IRA
owner.
The 2005 Katrina Emergency Tax
Relief Act into law on September 23,
2005. One provision under this act
allows individuals to deduct “qualified
contributions” up to 100 percent of
their contribution base (adjusted
gross income). Under existing law an
individual could only deduct 50%. A
“qualified contribution” is any
charitable cash contribution paid to a
public charity from August 28, 2005-
December 31, 2005.
And for those of us who like to
procrastinate, the IRS has officially
changed the automatic extension to
file personal income taxes to 6
months. It is not necessary anymore
to file a second extension. This
coincides with California.
| December 2005 Newsletter |
| Completax Planning, Inc. |
| 1100 Lincoln Avenue Suite 104 Napa, CA 94558 707-257-3995 800-244-3995 707-257-1306 fax |
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We sincerely wish you and your family a
very happy Holiday Season and a
wonderful New Year. Thank you for
your business, friendship and support
during this past year and we look
forward to working with you in 2006.
Some last minute financial and tax
planning thoughts:
Don’t forget the value of the annual gift
tax exclusion. You can give up to
$11,000 ($12,000 in 2006) each year
free of gift tax to anyone you want.
That amount rises to $22,000 ($24,000
in 2006) if you are married and your
spouse concurs, even if the entire
amount of the gift comes from your
separate assets. No gift tax is due
unless you use up your $1-million
exemption. Although the gift is not tax
deductible, it does reduce your taxable
estate.
Also, there is an unlimited break for
tuition paid directly to the schools for a
donee. It does not count toward the
$11,000 or $1-million exemptions.
This also applies to medical expenses
that donors pay for donees.
For estate tax purposes the Applicable
Exclusion Amount for 2006 is increased
from $1,500,000 to $2,000,000.
The IRS has announced a reduction in
the standard mileage rate for 2006.
Remember for 2005 the rate was 41.5
cents a mile, increased for September
to December to 48.5 cents. The IRS
has now published the rate for 2006 to
be 44.5 cents. The 2006 allowance for
medical and moving purposes will be
18¢.