CCH has published a summary of the 2009 Stimulus bill that President Obama is scheduled to sign Tuesday, February 17th. Significant items include:
It’s too early to say with certainty what changes will be made in the tax laws this year. But it’s possible to make some educated guesses.
Tax Cuts, or Increases?
Things seem to be skewing towards tax cuts for middle income taxpayers in 2009. Moreover, higher income earners probably won’t see tax rate increases this year.
If the present economic malaise does not extend past 2009, chances are good that tax rate increases will be enacted for the highest tax brackets in 2010. Instead of topping out at the current 35%, the top income tax rate could return to 39.6%, …Read More
The IRS has announced the cost of living adjustments applicable to dollar limitations for 401(k), profit sharing, IRAs, and other retirement plans in 2009. The new limits are as follows:
- 401(k) limit will increase from $15,500 to $16,500.
- 401(k) “catch-up” limit for individuals age 50 and over will increase from $5,000 to $5,500.
- Defined contribution plan limit will increase from $46,000 to $49,000.
- Defined benefit and cash balance plan annual benefit limit will increase from $185,000 to $195,000.
- Contribution limit for benefit and contribution calculation will increase from $230,000 to $245,000.
- Highly compensated employee definition will increase from $150,000 to
How much will you get back from the IRS this year? If you don’t know, than it’s a good time to begin your tax planning. Most people don’t plan their taxes and then hope for the best. If you get a larger refund than expected, you’re happy, but if you’re forced to pay taxes, you’ll be disappointed. Tax planning gets rid of these surprises.
The truth is, when your taxes are prepared, you are merely documenting the past. There is not much that can be done to save money, when compared to early tax planning. With tax planning there is …Read More
Both the U.S. House of Representatives and the U.S. Senate passed a bill that would waive required minimum distributions (RMD) in 2009. Normally, individuals over the age of 70.5 are required to withdraw an amount calculated by dividing the prior December 31st balance of the retirement account by the individual’s life expectancy as determined by the Internal Revenue Service. The government requires these distributions to ensure that money in retirement accounts is ultimately taxed. Failure to withdraw the required amount subjects the individual to a 50% penalty on the amount that should have been withdrawn in …Read More