Here are some of the changes in contributions and compensation limits that are in place for 2006:

IRA Contributions:

For those eligible, the 2006 maximum allowable contribution for a traditional IRA is $4000. This is the same for Roth IRA contributions as well. If you are age 50 or over, the catch up amount is an additional $1,000.

SEP Provisions:

For plan years beginning in 2006, the maximum compensation limit moves from $210,000 to $220,000

Maximum SEP Contributions for 2006 increase to $44,000 from $42,000, the limit in 2005.

Simple IRA Plans:

The non elective employer contribution wage base is $220,000.

Contribution limits for an employee remain at $10,000.

The catch-up provision for employees age 50 and over is $2500. This is up $500 from 2005.

401(k) Contribution Limits:

For 2006 the elective employee contribution is $15,000. This may also be subject to limitations under an employer plan. The catch-up provision is $5,000.

Social Security Wage Base: The new wage base is $94,200 up from $92,000 in 2005.

Annual Federal Gift Tax Exclusion:

Generosity increases $1,000 from 2005, with the new 2006 exclusion set at $12,000. In future years, this can again increase for inflation adjustments but only in $1,000 increments. It probably safe to say we wont be seeing any increases for a while.

Federal Estate Tax Exclusion Amount:

This has moved from $1,500,000 in 2005 to $2,000,000 in 2006 and will remain level through 2008. This is still a hot potato in Washington, and what will eventually happen here is still very much up for grabs.