In this issue:
 | Client Letter |
| Big changes make 2010 a watershed year for tax planning |
| Your 2010 Tax Reminders |
| Homebuyer credit extended and expanded in recent law |
| Your 2010 Tax Numbers |
New Year 2010
Your 2010 Tax Numbers
The law requires the IRS to make annual inflationary adjustments to a variety of tax numbers. Because 2009 inflation was minimal, most of these numbers will remain unchanged or change only slightly for 2010. Here are some of the key tax numbers you'll use for your 2010 tax planning.
| Provision | 2010 | |
| Standard mileage rate for business driving | 50¢ a mile | |
| Mileage rate for medical and moving expense deductions | 16.5¢ a mile | |
| Mileage rate for charitable driving | 14¢ a mile | |
| Adoption credit | $12,170 | |
| Maximum wages subject to social security tax | $106,800 | |
| Social security earnings limit | ||
| • Under full retirement age | $14,160 | |
| • Year full retirement age reached | $37,680 | |
| • Full retirement age | No limit | |
| Annual gift tax exclusion (per donee) | $13,000 | |
| Maximum retirement plan contributions | ||
| • IRA for those under 50 | $5,000 | |
| • IRA for those 50 and older | $6,000 | |
| • SIMPLE plan for those under 50 | $11,500 | |
| • SIMPLE plan for those 50 and older | $14,000 | |
| • 401(k) plan for those under 50 | $16,500 | |
| • 401(k) plan for those 50 and older | $22,000 | |
| "Kiddie tax" threshold | $1,900 | |
| "Nanny tax" threshold | $1,700 | |
| Personal exemption | $3,650 | |
| Standard deduction | ||
| • Single | $5,700 | |
| • Joint returns and surviving spouses | $11,400 | |
| • Married filing separately | $5,700 | |
| • Head of household | $8,400 | |
| • Additional for elderly or blind (married) | $1,100 | |
| • Additional for elderly or blind (single) | $1,400 |
Contact us. As you do your planning for 2010, be aware that Congress expects to take up major tax reform in 2010. See us prior to making business and financial decisions so that current rules and pending changes can be considered. We're here to help you make the choices that will minimize your taxes.
NOTE: This newsletter is issued annually to provide you with information about minimizing your taxes. Do not apply this general information to your specific situation without additional details. Be aware that the tax laws contain varying effective dates and numerous limitations and exceptions that cannot be summarized easily. For details and guidance in applying the tax rules to your individual circumstances, please contact us.