New Year Brings Tax Changes

RIVERWOODS, Ill., Jan. 9 /PRNewswire/ -- Annual inflation adjustments and scheduled increases will bring modest tax benefits to many taxpayers in 2006, according to CCH, a Wolters Kluwer business and a leading provider of tax and accounting law information, software and services ( http://tax.cchgroup.com/ ). But with the beginning of the new year, Congress has also heaped on special tax opportunities for energy conservation and an unwelcome helping of uncertainty to those subject to the alternative minimum tax (AMT).

Energy-Saving Credits -- Beginning this year, individuals can earn tax
credits based on purchases of energy-saving cars and home improvements.

AMT Uncertainty -- At the start of 2006, the exemptions for the
alternative minimum tax decreased from $58,000 to $45,000 for joint filers
and from $40,250 to $33,750 for unmarried filers. Both the House and the
Senate have passed AMT provisions that would preserve or increase the
previous exemption amounts, but taxpayers who might be affected by the
alternative minimum tax in 2006 will have to wait until Congress agrees on
an amount -- supposing that happens -- to know how big a bite the AMT
might take from their 2006 incomes.

Standard Deductions -- For 2006, the standard deduction increases to
$10,300 for married couples filing jointly; $5,150 for single taxpayers or
married taxpayers filing separately; and $7,550 for heads of households.
The additional standard deduction for those ages 65 or older or who are
blind remains at $1,000 for married individuals and surviving spouses,
$1,250 for unmarried filers.

Personal Exemption -- Each personal exemption will be worth $3,300 on 2006
returns.

Mileage Deductions -- The 2006 mileage deductions are 44.5 cents per mile
for business use of a car; 18 cents per mile for medical or moving
expenses; 14 cents per mile for charitable use. However, the rate for
miles driven for charities providing Hurricane Katrina relief will be 32
cents per mile for deduction purposes and 44.5 cents per mile for
reimbursement purposes.

IRA Contributions -- The amount you can contribute to a traditional or
Roth IRA remains to be $4,000 per year. The limit on additional annual
"catch up" contributions for those age 50 and older increases to $1,000.

IRA Phaseouts -- In 2006, the ability for those covered by a qualified
plan to make a deductible contribution to an IRA will begin to phase out
at $50,000 in adjusted gross income and end at $60,000 for single filers.
For marrieds filing jointly, the phaseout range is $75,000 to $85,000.

Contributions to 401(k)s, 403b and SEP Plans -- The annual limit on
elective deferrals to 401(k), 403(b) and SEP plans increases to $15,000
for 2006. The annual limit on "catch-up" contributions to these plans for
those 50 and older increases to $5,000.

FICA, Social Security Changes -- The FICA wage base increases to $94,200.
Workers under full retirement age who are receiving Social Security
benefits can earn up to $12,480 in 2006, or $1,040 per month, without
having their benefits reduced.

Tax Brackets Increase -- Tax brackets have been adjusted for inflation to
produce the following for 2006:

Married Filing Jointly (& Surviving Spouse)
2006 Taxable Income Tax Rate
$0-$15,100 10%
$15,100-$61,300 15%
$61,300-$123,700 25%
$123,700-$188,450 28%
$188,450-$336,550 33%
over $336,550 35%

Married Filing Separately
2006 Taxable Income Tax Rate
$0-$7,550 10%
$7,550-$30,650 15%
$30,650-$61,850 25%
$61,850-$94,225 28%
$94,225-$168,275 33%
over $168,275 35%

Single Filers
2006 Taxable Income Tax Rate
$0-$7,550 10%
$7,550-$30,650 15%
$30,650-$74,200 25%
$74,200-$154,800 28%
$154,800-$336,550 33%
over $336,550 35%


Head of Household
2006 Taxable Income Tax Rate
$0-$10,750 10%
$10,750-$41,050 15%
$41,050-$106,000 25%
$106,000-$171,650 28%
$171,650-$336,550 33%
over $336,550 35%

About CCH, a Wolters Kluwer business

CCH, a Wolters Kluwer business ( http://tax.cchgroup.com/ ) is a leading provider of tax, audit and accounting information, software and services. It has served tax, accounting and business professionals and their clients since 1913. Among its market-leading products are The ProSystem fx(R) Office, CCH(R) Tax Research NetWork(TM), Accounting Research Manager(TM) and the U.S. Master Tax Guide(R). CCH is based in Riverwoods, Ill.

Wolters Kluwer is a leading multinational publisher and information services company. Wolters Kluwer has annual revenues (2004) of 3.3 billion euros, employs approximately 18,400 people worldwide and maintains operations across Europe, North America and Asia Pacific. Wolters Kluwer is headquartered in Amsterdam, the Netherlands ( http://www.wolterskluwer.com/ ). Its depositary receipts of shares are quoted on the Euronext Amsterdam (WKL) and are included in the AEX and Euronext 100 indices.