Tax Tools

Below are a few of the most frequently needed information for the small business owner. We have listed various website links that can provide free, in-depth tax and related information needed.

Self-Employment Tax

The self-employment tax rate on net earnings remains the same for 2006. This rate, 15.3%, is a total of 12.4% for social security (old-age, survivors, and disability insurance) and 2.9% for Medicare (hospital insurance). The maximum amount subject to the Social Security part for tax years beginning in 2006 has increased to $94,200. All net earnings of at least $400 are subject to the Medicare part.

Depreciation and Section 179 Expense

Increased Section 179 limits. The maximum Section 179 deduction you can elect for property you placed in service in 2006 is increased to $108,000 per qualified Section 179 property. [This limit is reduced by the amount by which the cost of Section 179 property placed in service during the tax year exceeds $430,000.]

Social Security and Medicare Taxes
For 2006, the employer and employee will continue to pay:
6.2% each for social security tax (old-age, survivors, and disability insurance), and
1.45% each for Medicare tax (hospital insurance).

Wage limits

For social security tax, the maximum amount of 2006 wages subject to the tax has increased to $94,200. For Medicare tax, all covered 2006 wages are subject to the tax.

Alternative Motor Vehicle Credit

You may be able to claim this credit if you place an alternative motor vehicle in service for business or personal use after 2005. An alternative motor vehicle must meet certain requirements and be a new:

	Advanced lean burn technology vehicle
	Qualified alternative fuel vehicle
	Qualified fuel cell vehicle, or
	Qualified hybrid vehicle

Website Links to Tax Tools and Related Information

California Tax Service Center

Board of Equalization

Internal Revenue Service

Employment Development Department

Franchise Tax Board

California State Business Portal