January 2007Standard Meal Allowance Rate
The standard meal allowance rates for 2006 are $1.06 for breakfast, $1.96 for lunch and supper, and $0.58 for snack.
Standard Mileage Rate
The standard mileage rate for 2006 is 44.5 cents per business mile. The standard mileage rate for 2007 is 48.5 cents per business mile.
New Form 944
If you owe less than $1,000 in payroll taxes (or about $4,000 in total annual wages), you may be eligible to pay your payroll taxes at the end of the year using the new Form 944 Employer's Annual Federal Tax Return rather than filing the quarterly Form 941. To sign up to file this form, call the IRS at 800-829-0115.
IRA Tax Credit
The IRA Tax Credit has been permanently extended. Providers qualify for this credit if their adjusted gross income is $50,000 or less (married filing jointly), $37,500 or less (head of household), or $25,000 or less (single or married filing separately). The tax credit is calculated based on contributions to any qualified IRA up to $2,000 per person per year. The maximum credit is 50% of the contribution.
Energy Credit
Providers may be eligible for an energy tax credit for the purchase of windows, a main fan, a furnace, a hot-water boiler, a heat pump, a central air conditioner, and a water heater. These have a maximum credit of $500. If your Time-Space Percentage is above 20%, you can only claim the cost of the personal portion of the cost of the energy-efficient items toward this credit. That is, if your Time-Space percentage is 40%, you would be entitled to only 60% of the credit. Claim the credit on Form 1040, line 52.
Telephone Excise Tax Credit
On their 2006 tax returns, all taxpayers will be entitled to claim a credit for taxes paid on long-distance calls. The credit amount is $30 for taxpayers with one exemption, $40 for two exemptions, $50 for three exemptions, and $60 for four or more exemptions. Providers should claim this credit on Form 1040, line 71.