* PAYROLL TAX CUT for employees extended through February
29, 2012. (Social security tax rate on wages up to
$110,100 will be 4.2% rather than 6.2%.)
* ADOPTION TAX CREDIT decreases to $12,650 for adoption
of an eligible child.
* SECTION 179 maximum deduction decreases to $139,000,
with a phase-out threshold of $560,000.
* STANDARD MILEAGE RATE for business driving remains at
55.5¢ a mile. Rate for medical and moving mileage
decreases to 23¢ a mile. Rate for charitable driving
remains at 14¢ a mile.
* ESTATE TAX top rate remains at 35%, and the exemption
amount increases to $5,120,000. The ANNUAL GIFT TAX
EXCLUSION remains at $13,000.
* 401(k) maximum salary deferral increases to $17,000
($22,500 for 50 and older).
* SIMPLE maximum salary deferral remains at $11,500
($14,000 for 50 and older).
* IRA contribution limit remains at $5,000 ($6,000 for
50 and older).
* KIDDIE TAX threshold remains at $1,900 and applies up
to age 19 (up to age 24 for full-time students).
* NANNY TAX threshold increases to $1,800.
* TRANSPORTATION FRINGE BENEFIT limit decreases to $125
for vehicle/transit passes and increases to $240 for
qualified parking.
* SOCIAL SECURITY taxable wage limit increases to
$110,100. Retirees under full retirement age can earn
up to $14,640 without losing benefits.
* HSA CONTRIBUTION limit increases to $3,100 for
individuals and to $6,250 for families. An additional
$1,000 may be contributed by those 55 or older.
David Bradsher, CPA is a Washington DC / Northern Virginia area CPA who works with small business owners and non profit leaders on a monthly basis to provide them with guidance and advice on how to grow their organizations, minimize their tax liabilities and increase their bottom line.
