2009 Mileage Rates

he Internal Revenue Service has issued the _2009_ 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, 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.

Reminder: The business mileage rate was 50.5 cents in the first half of 2008 and 58.5 cents in the second half. The medical and moving rate was 19 cents in the first half and 27 cents in the second half.
More info on the IRS web site.

Stimulus Rebate

To find the amount you received last year for your Stimulus Rebate, go to the IRS web site at:
https://sa2.www4.irs.gov/irfof/IRServlet?app=IRACTC&selectLanguage=en

Savers Retirement Credit

Low- and moderate-income workers can take steps now to save for retirement and earn a special tax credit in 2008 and the years ahead, according to the Internal Revenue Service.
The saver’s credit helps offset part of the first $2,000 workers voluntarily contribute to Individual Retirement Arrangements (IRAs) and to 401(k) plans and similar workplace retirement programs. Also known as the retirement savings contributions credit, the saver’s credit is available in addition to any other tax savings that apply.
In tax-year 2006, the most recent year for which complete figures are available, saver’s credits totaling almost $900 million were claimed on nearly 5.2 million individual income tax returns. Saver’s credits claimed on these returns averaged $213 for joint filers, $149 for heads of household and $128 for single filers.
Our tax software will help ensure you take advantage of this and other benefits for which you qualify. You can find the income qualifying limits at the IRS site.

Military Tax Relief

The Heroes Earnings Assistance and Relief Act included tax incentives that will benefit many military families in 2008. These tax breaks are targeted to servicemen and women on active duty, reservists who are called to active duty, military families, and employers. Here are is one of the highlights of the military tax relief act…
Combat pay. Tens of thousands of U.S., troops are serving in combat zones around the world. Combat pay is tax-free. However, this tax-free treatment can cause some military families to loose eligibility for the earned income credit. The military tax relief act treats combat pay as earned income for purposes of the earned income credit. This treatment is permanent, will help soldiers in 2008 and is also retroactive to December 31, 2007.
The IRS has a special section of its web site designed to help members of the military is can be found at:
http://www.irs.gov/newsroom/article/0,,id=97273,00.html

Roll-overs to Roth IRA

You may want to consider converting your Regular IRA into a Roth IRA in 2009. The opportunity opens up to more people in 2010. This this your total income must be under $100,000. This limit goes away next year. The amount rolled over will be subject to regular income.

Why this may make sense for you? With the stock market down so much and likely to have a significant improvement in the next two years, you can pull out income at the bottom of the market. Then reinvest in a tax-free Roth IRA before it goes back up. Be careful about the rollover rules. Have the funds transferred directly to be sure it happens timely. Don't take the funds expecting to find a new home for them later. Also, with the ecomony is such bad shape, you may be reporting less overall income in 2008, to the tax rate on the withdrawal will be less than it may have been in 2007 or 2008.
A handy-dandy calculator can help you decide. Find one at CalcXML.

Recycled paper and less of it

I am a creature of habit. When Kimberly Clark discontinued my favorite stationary, I found a Neenah paper that looked exactly the same, in the same beautiful gray. Twenty years… one paper. But an accountant can change, and last year I finally changed papers. 100% post consumer recycled paper was too hard to resist, in a classy shade of beige. And recycled paper takes 40% less energy to produce. Taking one more small step, I changed to recycled paper for our report covers, confirmations paper and copier/printer paper. In the last three years, we have substantially cut our use of paper. We send, received and store files electronically. We learned that working with two monitors is the biggest change needed to work paperless.

Donate, Recycle Electronics

Recycle your computer and electronic equipment to save damage to the environment. The U.S. E.P.A. as a list of non-profits excepting donations. Save three ways: protect the environment, clean out the garage and gain a tax deduction. My web site has a links for more information on this and many other items.