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CURRENT NEWS ITEMS:
Optional Milage Rates Announced
IRS has announced that the optional mileage allowance for owned or leased autos (including vans, pickups or panel trucks) will increase 4.5¢ from 51¢ to 55.5¢ per mile for business travel from July 1, 2011 to Dec. 31, 2011 to better reflect the real cost of operating an auto in this period of rapidly rising gas prices. This rate can also be used by employers to reimburse tax-free under an accountable plan employees who supply their own autos for business use, and to value personal use of certain low-cost employer-provided vehicles. The rate for using a car to get medical care or in connection with a move that qualifies for the moving expense will also increase 4.5¢ for the last half of 2011 from 19¢ to 23.5¢ per mile.
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Social Security wage base rises to $106,800 for 2009:
The Social Security Administration has announced that the wage base for computing the Social Security tax (OASDI) in 2009 rises to $106,800 from $102,000 in 2008, an increase of about 4.7%. The $4,800 increase is due to an increase in average total wages.
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Nanny tax threshold increases to $1,700 for 2009:
On Social Security Online, the Social Security Administration has announced that for 2009, cash remuneration paid by an employer for domestic service in the employer's private home isn't FICA wages if the amount paid during the year is less than $1,700 (increased from $1,600 for 2008).
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Retirement plan dollar limits increase for 2009:
Elective deferrals. The limit on the exclusion for elective deferrals described in is increased from $15,500 to $16,500. Deferred compensation plans. The limit on deferrals under Sec 457, concerning deferred compensation plans of state and local governments and tax-exempt organizations, is increased from $15,500 to $16,500. SEPs. The compensation limit under (amount of compensation above which an employee who meets other requirements must be able to participate in the employer's SEP plan) is increased from $500 to $550. SIMPLE plans. The maximum amount of compensation an employee may elect to defer under for a SIMPLE plan is increased from $10,500 to $11,500. Catch-up contributions. The dollar limit under for catch-up contributions to an applicable employer plan (401K) for individuals aged 50 or over is increased from $5,000 to $5,500.
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