AAF NEWS FLASH

January 2009

 

Alexander, Aronson, Finning & Co., P.C. (AAF) is committed to keeping you informed of the latest news. As you prepare for the upcoming tax year, we thought you might find this brief rundown of 2009 tax changes useful.

ADOPTION TAX CREDIT increases to $12,150 for adoption of an eligible child.

SECTION 179 maximum deduction decreases to $133,000. Phase-out threshold is $530,000. (It is generally expected that a stimulus law in early 2009 will increase these amounts to the 2008 levels of $250,000 and $800,000.)

STANDARD MILEAGE RATE for business driving effective January 1, 2009, is 55¢ a mile. Rate for medical and moving mileage is 24¢ a mile. Rate for charitable driving remains at 14¢ a mile.

ESTATE TAX top rate remains at 45%, but the exemption amount increases to $3.5 million. The ANNUAL GIFT TAX EXCLUSION increases to $13,000.

401(k) maximum salary deferral increases to $16,500 ($22,000 for 50 and older).

SIMPLE maximum salary deferral increases to $11,500 ($14,000 for 50 and older).

IRA contribution limit remains at $5,000 ($6,000 for 50 and older).

KIDDIE TAX threshold increases to $1,900 and applies up to age 19 (up to age 24 for full-time students).

NANNY TAX threshold increases to $1,700.

TRANSPORTATION FRINGE BENEFIT limit increases to $120 for vehicle/transit passes and to $230 for qualified parking.

SOCIAL SECURITY taxable wage limit increases to $106,800. Retirees under full retirement age can earn up to $14,160 without losing benefits.

HOPE CREDIT maximum remains at $1,800.

HSA CONTRIBUTION limit increases to $3,000 for individuals and to $5,950 for families. An additional $1,000 may be contributed by those 55 or older.

Thanks to the late passage in 2008 of AMT patch legislation, the AMT exemption amounts for 2008 are $69,950 for joint filers, $34,975 for couples filing separately, and $46,200 for single taxpayers and heads of household.

Please e-mail (info@aafcpa.com)or call us (508-366-9100) for more information about these important tax changes and to see how you might reduce your tax liability. Don't forget to visit our online 2008/2009 Tax Planning Guide located on our website at http://www.aafcpa.com/tax-plan.htm for more useful tips!

Best Regards ,

Your Friends at Alexander, Aronson, Finning & Co.

P.S. Tell your business associates and friends to visit our online 2008/2009 Tax Planning Guide at http://www.aafcpa.com/tax-plan.htm. We do appreciate referrals.

 

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You are receiving this information because you are a valued client or friend of AAF. Please contact Angela Balter by e-mail (abalter@aafcpa.com) or phone (508-366-9100) if you would prefer not to receive this publication.

Any tax advice contained in this e-mail was not intended or written by the practitioner to be used (and cannot be used) by the taxpayer to avoid penalties that may be imposed under the Internal Revenue Code or state or local tax law provisions