New Tax Laws for 2006
Like spring's promise of budding blooms, 2006 has a bumper crop of new tax laws that will help you reap write-offs. Legislation signed into law in 2005 that affects businesses includes the Energy Tax Incentives Act of 2005 and the Katrina Emergency Tax Relief Act of 2005, as well as legislation relating to transportation and to bankruptcy abuse.
The following are some changes for 2006 that business owners will enjoy:
- Businesses receive a 30 percent credit for the installation of solar heating units and fuel-cell equipment.
- Energy-saving improvements to commercial realty can be expensed, though the deduction is capped at $1.80 per square foot of floor space.
- Small businesses can expense more equipment-up to $108,000. This phases out once $430,000 worth of assets are put into service for the year.
- The standard mileage rate for business driving is now 44.5 cents per mile. Charitable driving is 14 cents per mile, and any driving related to Hurricane Katrina relief is 32 cents a mile. Reimbursements of Katrina-related driving are tax-free up to 44.5 cents per mile.
- Companies can pay for $205 of tax-free parking per month for employees, up from $200 per month.