Each year, the IRS changes certain key numbers. Three categories that merit immediate attention by the savvy small business CFO are retirement plan limits, wage base, and mileage rate.

1. Retirement plan limits — Start now to maximize how much income you can turn from taxable to non-taxable through company- sponsored retirement plans. Your company can have one type of plan - e.g.SIMPLE IRA, SEP IRA or 401K. So before registering any activity in a plan, make sure it’s the right one for your company this year.Both the SIMPLE IRA and 401K are efficient in that most of the contributions come from employee paycheck deferrals, so there’s limited expense to the company. With a SIMPLE IRA you can defer up to $10,000 ($12,500 if you’re over 50) in 2006; with a 401K up to $15,000 ($20,000 50+).In addition, the 401K can be supercharged with a discretionary contribution that doesn’t have to be paid until the company files its tax returns in 2007. This is 100% employer paid for, but there are ways to tilt the balance toward the owners and other highly compensated employees.If you don’t have enough cash to merit either of these plans, and offering such plans as an employee benefit isn’t necessary, consider setting aside $4,000 ($5,000 50+) in a regular or Roth IRA.The main message is: start saving now, no matter how small or large yourcontribution, so you have the money set aside by December.
2. Wage base —If you do payroll in house, your bookkeeper must know the new Social Security and Medicare limits, as well as any state limits, such as California’s SDI.
3. Mileage Rate — Starting January 1st, 2006, the IRS will let you deduct 44.5 cents for business miles driven if your company uses the standard mileage rate.So if an employee drives 1,000 miles per year, that’s close to a $500 hit to the bottom line.But you don’t have to reimburse employees at the IRS maximum rate. See IRS Announces 2006 Standard Mileage Rates.