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Cheryl's Sensible Cents - February 2007 Newsletter
February 20, 2007
In This Issue:

Article: Your Gift from the IRS for 2006: New Limits and Contribution Amounts

Recipe: Cheddar Potato Bake

Debt Doesn't Have to Control Your Life!

Your Gift from the IRS for 2006:
New Limits and Contribution Amounts

By Glenn Dahlke

Get a personal budget today

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 won’t 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.

Glenn ("Chip") Dahlke, a senior contributor to the Living Trust Network, has 28 years in the investment business. He is a Registered Representative of Linsco/Private Ledger and a principal with Dahlke Financial Group. He is licensed to transact securities with persons who are residents of the following states: CA. CT, FL, GA, IL. MA, MD. ME, MI. NC, NH, NJ, NY.OR, PA, RI, VA, VT, WY.

If you have any questions or comments, Chip would love to hear from you. You may contact him by email at You may also contact him at the Living Trust Network's web site. Its URL is

Copyright 2005. Living Trust Network, LLC. All Rights Reserved.

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Cheddar Potato Bake

1/4 cup butter, melted
1 can cream of mushroom soup
1/2 teaspoon Salt
1/2 teaspoon Pepper
1/2 teaspoon Paprika
1/2 medium Onion, chopped
2 cups sharp Cheddar Cheese
8 cups potatoes, peeled and sliced (1/4 inch thick)

In a large bowl:
Combine butter, soup, salt, pepper, paprika, onion, and 1 cup cheese. Add potatoes and toss to coat well.

In a large baking dish:
Arrange potato mixture and cover with aluminum foil. Bake at 400 degrees F. for one hour. Uncover and top with remaining cheese. Bake an additional 10-20 minutes or until fork tender. Makes 8-10 servings.

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