News
Copies of the 2010 Percentage Method Income Tax Withholding and Advanced Earned Income Credit Payment Tables
2010 Mileage Rates
WASHINGTON — The Internal Revenue Service today issued the 2010 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes.
Beginning on Jan. 1, 2010, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be:
- 50 cents per mile for business miles driven
- 16.5 cents per mile driven for medical or moving purposes
- 14 cents per mile driven in service of charitable organizations
Social Security W-2 News
For Employers and Businesses Who Submit W-2 Forms
From the IRS
Social Security Wage Base Remains at $106,800 in 2010. The Social Security Administration Announced on Thursday, October 15, 2009, that the 2010 social security wage base will be unchanged at $106,800. The maximum social security tax employees and employers will each pay in 2010 is also unchanged at $6,621.60.
IRS Announces Limited Changes in 2010 Amounts for Standard Deduction, Transportation Fringes, and Earned Income Credit
The IRS has released inflation-adjusted tables for 2010 reflecting no changes in many of the items reported because the Consumer Price Index remained flat over the past year [Rev. Proc. 2009-50, 10-15-09].
Standard deduction and personal exemption
The standard deduction amounts for 2010 remain unchanged at $11,400 for married couples filing jointly or surviving spouses and $5,700 for single taxpayers and married taxpayers filing separately, while increasing to $8,400 for heads of households ($8,350 in 2009). The personal exemption amount for 2010 is $3,650, unchanged from 2009.
Qualified transportation fringes
The amounts that may be excluded from gross income for employer-provided "qualified transportation fringe benefits" for 2010 are as follows: $230 per month for "transportation in a commuter highway vehicle and any transit pass" (unchanged from 2009), and $230 per month for "qualified parking" (unchanged).
Earned income credit
For 2010, the Earned Income Credit for employees with one qualifying (dependent) child is 34% of the first $8,970 of earned income, for a maximum of $3,050 ($3,043 in 2009). For employees with two qualifying children, the EIC is 40% of the first $12,590 of earned income, for a maximum of $5,036 ($5,028 in 2009). For employees with three or more qualifying children, the EIC is 45% of the first $12,590 of earned income, for a maximum of $5,666 ($5,657 in 2009), and for employees with no qualifying children, the EIC is 7.65% of $5,980, for a maximum of $457 (unchanged from 2009). Married employees filing jointly who earn less than $40,545 in 2010 ($35,535 for single employees) and who have at least one qualifying child can receive advance payments of their EIC of up to $1,830 ($1,826 in 2009) spread out over their pay periods during the year.
Foreign earned income exclusion
For 2010, the maximum foreign earned income exclusion amount under IRC §911(b)(2)(D)(i) is $91,500 ($91,400 in 2009). The maximum foreign housing cost exclusion amount under IRC §911(c)(2) is $12,810 ($12,796 in 2009).
Pension Plan Limits Will Remain the Same in 2010
The IRS has announced the cost-of-living adjustments (COLAs) applicable to dollar limits on benefits and contributions under qualified retirement plans, as well as other items, for tax year 2010. While the cost-of-living index actually decreased from 9-30-08 to 9-30-09, the IRS said that the 2010 limits will be the same as those in effect for 2009 [IR-2009-094, 10-15-09].
• The limitation on the exclusion for elective deferrals under §402(g)(1) (e.g., §401(k) and §403(b) plans) is unchanged at $16,500.
• The limit on annual additions to defined contribution plans under §415(c)(1)(A) is unchanged at $49,000.
• For limitation years ending after December 31, 2009, the limit on the annual benefit under a defined benefit plan contained in §415(b)(1)(A) is unchanged at $195,000.
• The annual compensation limit under §401(a)(17) and §404(l) is unchanged at $245,000.
• The compensation amount under §408(p)(2)(E) regarding elective deferrals to SIMPLE retirement accounts is unchanged at $11,500.
• The limitation under §457(e)(15) concerning elective deferrals to deferred compensation plans of state and local governments and tax-exempt organizations (§457(b) plans) is unchanged at $16,500.
• The limitation under §416(i)(1)(A)(i) concerning the definition of "key employee" in a top-heavy plan is unchanged at $160,000.
• The limitation under §414(v)(2)(B)(i) for catch-up contributions to §§401(k), 403(b), and 457(b) plans for individuals age 50 or over is unchanged at $5,500; the limitation under §414(v)(2)(B)(ii) for catch-up contributions to an employer's SIMPLE plan for individuals age 50 or over remains unchanged at $2,500.
• The limitation used in the definition of "highly compensated employee" under §414(q)(1)(B) is unchanged at $110,000.
• The compensation amount under §408(k)(2)(C) regarding simplified employee pensions (SEPs) is unchanged at $550.
• The compensation amount under federal regulation §1.61-21(f)(5)(i), concerning the definition of "control employee" for fringe benefit purposes, is unchanged at $95,000. The compensation amount under §1.61-21(f)(5)(iii) is unchanged at $195,000.