Prepare for these changes to Form 1040 this year — Business Management Daily: Free Reports on Human Resources, Employment Law, Office Management, Office Communication, Office Technology and Small Business Tax Business Management Daily

Prepare for these changes to Form 1040 this year

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The IRS must amend Form 1040 virtually every year to accommodate new laws, rulings and cases.

Here’s an overview of the key updates for 2006 returns on a line-for-line basis:

Line 7: Wages, salaries and tips. The maximum amount of salary that you can elect to defer under all qualified retirement plans for 2006 is generally limited to $15,000 ($20,000 if age 50 or older).

Line 8b: Tax-exempt interest. Payers of tax-exempt interest must report this amount to both recipients and the IRS.

Line 15: IRA distributions. Qualified hurricane- relief distributions can be recontributed tax-free to a qualified retirement plan or IRA. The taxable portion may be computed under three-year averaging.

Qualified hurricane victims may be entitled to enhanced liberalized rules for qualified retirement plan loans. Use new Form 8915.

Under the Pension Protection Act of 2006, taxpayers age 701/2 and older can roll over distributions from a traditional or...(register to read more)

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