2010 Tax Updates

2010 Mileage Rates, Gifting Limit, Retirement Plans

The New Year is a time for individuals and business owners to make New Year’s resolutions!  It is also a time that brings new rules, limits and rates.  Hopefully I can touch on the changes that are most pertinent to you.

Mileage Rates

The IRS released (IR-2009-111) the standard mileage rates for 2010.

  • 50 cents per mile for business miles driven, down from the 55 cents in 2009
  • 16.5 cents per mile for medical or moving purposes, down from 24 cents
  • 14 cents per mile for charitable causes, which is the same as 2009

Gifting Limit

The IRS announced in Revenue Procedure 2009-50 that the gift tax annual exclusion amount available to taxpayers in 2010 will remain unchanged at $13,000.  This exclusion permits each taxpayer to gift $13,000 annually to any beneficiary without being required to use his or her lifetime gift exemption amount.  This means if you and your spouse want to gift to each child, you can each gift $13,000 for a total of $26,000 to each child.

Contribution Limits for Retirement Plans

The IRS announced the Pension Plan limitations for 2010 in IR-2009-94. The most frequently asked about plans are:

  • SIMPLE — remains unchanged at $11,500 with a $2,500 catch-up provision for individuals 50 or over
  • SEP — remains unchanged at $49,000
  • 401(k) — Maximum elective deferral remains unchanged at $16,500 with a $5,500 catch-up provision for individuals over 50.  The annual limit on additions to the plan remain at $49,000, or $54,500 for participants age 50 or older.

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