Business tax law changes for the 2006 tax year - what you need to know
Some people would tend to think that if you were going to run a business you just rent the shop, open it up and start running it. But you have to buy all the supplies and you have to keep the supplies in supply. You have to buy the equipment. You have to pay the employees. You have to do so many things. It is not a simple process.
One thing that many people probably tend to forget about businesses is that are specific business tax laws. Some people may think that taxes only have to do with your own personal income but that is not true. There are tax laws for basically everything on the planet and businesses are one of those thing.
Finances are a huge part of business. They are probably the majority of business. If you do not do well with your finances, your business will not do well. If you do very well with your finances, your business will do fantastic. It all depends on money: how much are you bringing in, how much are you paying towards expenses etc.
Tax laws are just another thing to keep in mind when doing business finances. Since finances are so important, tax laws and tax law changes are also incredibly important. You have to stay updated on tax law changes and such so that you can keep your finances accurate and do all that you are supposed to for the taxes.
In the year 2006, tax laws for businesses were changed again. One such change was that the maximum amount of self-employment income was changed from 90,000 dollars to 94,000 dollars. This means that you can now make more money than you could before. It may not actually be more though with inflation rates and such.
Another change happened and is interlinked with the wage change. Just as the max self-employment income was changed from 90,000 to 94,000, so did the max amount of wages subject to social security taxes. This means that although your max income went up, that max income is all subject to social security taxes. It means that if you made more than that not being self-employed that your social security taxes just went up by 4,000 dollars. That must be a bummer for those people.
Another change that occurred was that the standard mileage rate for business dropped from 48.5 cents per mile to 44.5 cents per mile. That is another thing that just might be a bummer for those businesses that spend a lot of time on the road. It dropped an entire four cents per mile. For those putting in a lot of mileage, that really stinks.
Finally, another important change was that section 179 expense deduction changed. The maximum amount of expense deduction that you used to be able to have was 105,000 dollars. That has now gone up to 108,000 dollars.
These are all things that you need to keep in mind when doing your business finances and you need to adjust your budget and such around anything that might be a problem. If you drive a lot you might want to cut down that driving time.things like that. That may or may not help your company, the point is to adjust your budget to fit the 2006 business tax law changes.