Tax & Business Services

Standard Mileage Rate
For 2007, the standard mileage rate for the cost of operating your car, van, pickup, or panel truck for business purposes is 48.5 cents a mile.

Self-Employment Tax
The self-employment tax rate is 15.3%. Of that, 12.4% is for Social Security (old-age, survivors and disability insurance) and 2.9% is for Medicare (hospital insurance).

The maximum amount subject to Social Security is $94,200. All net earnings of at least $400 are subject to the Medicare percentage.

Getting an Extension
You can get an automatic 6-month extension to Oct. 15, and you don't need to supply a reason or even a signature.

But keep in mind, an extension of time to file does not mean an extension of time to pay. If you do not pay your balance due on tax day, you may be charged interest or penalties on the amount you federal income tax owe.

To get an extension, file Form 4868, Application for Automatic Extension of Time to File U.S. Individual Income Tax Return. The federal income tax form and instructions are available at the IRS Web site. There are several options for filing an extension as well as paying a balance due.

Social Security and Medicare Taxes
The employer and employee pay:

• 6.2% each for Social Security tax (old-age, survivors and disability insurance)
• 1.45% each for Medicare tax (hospital insurance)

For Social Security tax, the maximum amount of wages subject to the tax is $94,200. For Medicare tax, all covered wages are subject to the tax. Circular E (Publication 15), Employer's Tax Guide, has more information about these taxes.

Highway Vehicle Use Tax
If you use vehicles with taxable gross weights of 55,000 pounds or more for your small business, you probably file Form 2290, Heavy Highway Use Tax Return. You must pay your balance due in full when filing your federal income tax return.

Also, if Canadian or Mexican vehicles are registered in your name, the reduced tax rates no longer apply to these vehicles. However, if you own logging vehicles, the reduced rates shown on the Tax Computation worksheet will still apply.

For more information, view Form 2290 Instructions.