New Rules for 2007

As we begin the new year, you'll want to keep in mind some of these new or updated tax law provisions that take effect January 1:

Individuals

• Charitable contributions have to be documented in order to count. Cancelled checks or receipts can fill that requirement. No more deductions for cash in the offering plate or Salvation Army kettle, though.
• Private Mortgage Insurance (PMI) is now deductible if you get your mortgage in 2007 or beyond.
• You can contribute an extra $500 to your 401(k) plan with a new maximum amount of $15,500.

Businesses

• Maximum amount of equipment purchases you can immediately expense instead of depreciate increases to $112,000.
• Standard mileage rate is up to $0.485 per mile.
• For contractors and manufacturers, the pruduction activities deduction increases from 3% to 6% of your income.