Business Planning - Shobe Financial Group

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	2011	2012
Maximum amount that can be excluded from employee’s gross income	$13,360	$12,650
Phaseout threshold amount	$185,210	$189,710
Completed phaseout amount after	$225,210	$229,710

Earnings subject to FICA taxes (taxable wage base)

	2011	2012
Maximum annual earnings subject to Social Security taxes	$106,800	$110,100
Social Security and Medicare combined tax rate	13.30% ¹	15.30%
OASDI portion (Social Security)	10.40%¹	12.40%
Hospital Insurance portion (Medicare)	2.90%	2.90%

¹ The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 included a 2% reduction in the Social Security (OASDI) portion of FICA tax for 2011.

Health insurance deduction for self-employed

	2011	2012
Deduction for health insurance premiums paid by self-employed persons	100%	100%

Qualified transportation fringe benefits

	2011	2012
Commuter vehicles and transit pass monthly exclusion amount	$230	$125
Qualified parking monthly exclusion amount	$230	$240
Qualified bicycle commuting reimbursement fringe benefit (monthly amount)	$20	$20

Section 179 expensing

	2011	2012
Maximum amount that may be deducted under section 179	$500,000	$139,000
Deduction reduced by the amount by which the cost of §179 property placed in service during the year exceeds this amount	$2,000,000	$560,000

Small business tax credit for providing health-care coverage

	2011	2012
Maximum credit percentage	35%	35%

Partial credit	2011	2012
Number of full-time equivalent employees (FTEs) fewer than:	25	25
Maximum average annual wages less than:	$50,000	$50,000

Full credit	2011	2012
Number of full-time equivalent employees (FTEs) no more than:	10	10
Maximum average annual wages less than or equal to:	$25,000	$25,000

Special additional first-year depreciation allowance

	2011	2012
“Bonus” depreciation for qualified property acquired and placed in service during specified time periods	100%²	50%

² 100% “bonus” depreciation applies to qualifying property purchased and placed in service after 9/8/10.

Standard mileage rate (per mile)

	2011	2012
Use of auto for business purposes	$0.51 for first half of 2011; $0.555 for second half	$0.555

Tax on accumulated earnings and personal holding company income

	2011	2012
Maximum tax on these items (prior to the 2003 Tax Act, these items were taxed at the highest marginal personal income tax rate)	15%	15%

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