TAX UPDATES 2009 and 2010

2009 and 2010 California UI and SDI rates

For 2009, SDI is 1.1% on a wage limit of $90,669, for a maximum of $997.36.

For 2010, SDI is 1.1% on a wage limit of $93,316, for a maximum of $1026.48

Social Security updates

The social security taxable wage limit increases to $106,000 for 2009 (rates remain 6.2% OASDI and 1.45% Medicare with no wage cap) and remains the same for 2010.

2009 and 2010 standard mileage rates

The standard mileage rates for use of a car in 2009 (includes vans, pickup trucks or panel trucks):

55.0 cents per mile for business miles driven (2010 is 50 cents per mile)

24 cents per mile for medical or moving purposes

14 cents per mile for service of charitable organizations

For 2010, the rate drops to 50 cents per business mile

2009 Maximum Contributions to Retirement Plans

IRAs (regular and Roth, same for 2009 and 2010)

Up to age 50 $5000

Age 50+ $6000

401(k); 403(b); 457 plans

Up to age 50 $16,500

Age 50+ $22,000

Simple IRAs

Up to age 50 $11,500

Age 50+ $14,000

Defined Contribution Plans

Profit Sharing/Money Purchase $49,000

SEP IRA $49,000

Year End Tips for Self-Employed

Buy equipment

Pay all expenses if on a cash basis

Set up a retirement plan

Organize your records

Look into a Home Office deduction

Consider employing spouse and deducting health insurance

Gift tax exclusion is $13,000 for 2009 and 2010