Payroll Changes for 2007

Payroll administrators should be aware of several changes in withholding and benefits that go into effect January 1, 2007.  They are as follows:

FICA/FUTA Taxes— the Social Security taxable wage base increases to $97,500 starting Jan. 1, 2007.

Health or Medical Savings Accounts— the allowable annual deductible on HSAs rises to $1,100 for individual coverage and $2,200 for family coverage.

Section 401(k) Plans— the annual limit on 401(k) plan deferrals increases to $15,500.

Business Expense Reimbursement— Effective Jan. 1, 2007, the Internal Revenue Service's standard mileage rate for use of company vehicles (including cars, vans, pickups, or panel trucks) is 48.5 cents per mile.

Automobile Use— Corporate officers paid at least $90,000 annually in 2007 are considered “control employees” for employer automobile policies.  Effective Jan. 1, 2007, the Internal Revenue Service's standard mileage rate for use of company vehicles (including cars, vans, pickups, or panel trucks) is 48.5 cents per mile.