Articles from our newsletter.

2009 IRA Contribution Limit

The maximum contribution limit for traditional and Roth IRAs has increased to the lesser of: $5,000 ($6,000 for taxpayers age 50 or older at the end of the year), or taxable compensation. If your modified AGI exceeds the applicable limit the maximum traditional IRA deduction and maximum Roth IRA contribution may be limited.

KIDDIE TAX

Kiddie Tax rules (the investment income of a child may be taxed at the parent's rate): Beginning in 2008 the rules apply to a child who is age 18 or under at the end of the year, has investment income of more than $1,700 and whose earned income is not more than half of the child's support. It also applies to a student who's under age 24 at the end of the year and whose earned income is not more than half of the child's support. What is a student? A child who during any part of five calendar months of the year was enrolled as a full time student at a school or took a full time on farm training course given by a school or state, county, or local government agency. It includes a technical trade or mechanical school but does not include on the job training courses, correspondence school, or a school offering courses only through the internet. This is a permanent tax law change meaning it does not expire. It will stay in effect until Congress sees fit to repeal it or change it again.

Consumer Alert

The IRS warns taxpayers to be on the alert for e-mails and phone calls they may receive which claim to come from the IRS or other federal agency and which mention their tax refund or economic stimulus payment. These are almost certainly a scam whose purpose is to obtain personal and financial information - such as name, Social Security number, bank account and credit card or even PIN numbers - from taxpayers which can be used by the scammers to commit identity theft. The e-mails and calls usually state that the IRS needs the information to process a refund or stimulus payment or deposit it into the taxpayer's bank account. The e-mails often contain links or attachments to what appears to be the IRS Web site or an IRS "refund application form." However genuine in appearance, these phonies are designed to elicit the information the scammers are looking for. The IRS does not send taxpayers e-mails about their tax accounts. Additionally, the way to get a tax refund or stimulus payment, or to arrange for a direct deposit, is to file a tax return.

Important Mileage Information!

Beginning on Jan. 1, 2009, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be:

55 cents per mile for business miles driven
24 cents per mile driven for medical or moving purposes
14 cents per mile driven in service of charitable organizations
The new rates for business, medical and moving purposes are slightly lower than rates for the second half of 2008 that were raised by a special adjustment mid-year in response to a spike in gasoline prices. The rate for charitable purposes is set by law and is unchanged from 2008.

For 2008, the standard mileage rate for the cost of operating your car for business use is:

50.5 cents per mile for the period January 1 through June 30, 2008, and
58.5 per mile for the period July 1 through December 31, 2008.
Medical- and move-related mileage. For 2008, the standard mileage rate for the cost of operating your car for medical reasons or as part of a deductible move is:
19 cents per mile for the period January 1 through June 30, 2008, and
27 cents per mile for the period July 1 through December 31, 2008.
Charitable-related mileage. For 2008, the standard mileage rate for the cost of operating your car for charitable purposes remains 14 cents per mile.