There are important tax changes you should be aware of for the 2006 tax year. Several deduction amounts have increased. The standard deduction starts at $5,350 for a married person filing separately, and ranges up to $10,700 for married couples filing jointly. The standardized head of household deduction is $7,850. The maximum amount of income you can earn and still get the earned income credit, or EIC (E-I-C), has also increased to $2,850 with one qualifying child. EIC is based upon your adjusted gross income, or AGI. Standard mileage rates for operating your car for business, medical, and moving have all increased. The standard deduction for business miles driven is 48.5 cents per mile. For medical or moving, the standard deduction is 18 cents per mile. There are also new restrictions on charitable contributions. If you need specific advice regarding any of the new tax changes, please consult a tax advisor or call the toll-free number for Federal Tax Information and Assistance at 1-800-829-1040.
