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Text Box: •Special 50% Bonus First-Year Depreciation has expired •Up to $105,000 of assets placed in service can be expensed •Firms can pay a little more tax-free parking for employees…$200 per month •Domestic Production companies can deduct 3% of net income earned from U.S. production •401(k) deferral rises to $14,000, or $18,000 if you were born before 1956 •IRA’s and Roth IRAs allow $4,000, or $4,500 if you were born before 1956 •Estate tax exemption remains at $1.5 million and annual gift tax exclusion remains at $11,000 per donee What’s in the Works? •First year write offs for SUV’s reduced from $25,000 to $3,000 (Exception: Pick-up trucks) •Flex plans barring reimbursement for non- prescritption drug costs In the Works, but won’t fly… •Ending write-off on home equity loans •Revamping kiddie tax so unearned income over $2,500 (for children under the age of 18) would be taxed at 35%. Currently the age is 14 and the amount over $2,500 is taxed at the Parent’s rate Roth 401(k)?? What ch-u talking ‘bout, Willis? Has Chico been working a little too hard? Is he confusing a Roth with a 401(k)? I assure he is relatively sane and that the Roth 401(k) does exist. Employers can begin offering them January 1, 2006. The account combines features of Roth IRA’s with features of 401(k) plans. Basically, the employee may elect to have an amount put into the Roth 401(k) instead of the regular 401(k), or both. However, the limit to both accounts combined is $15,000. Unlike Roth IRA’s which do not allow married persons to contribute if their income is over $160,000, the Roth 401(k) has no income limitations. Remember, you will still pay tax on the amounts you contribute.