There’s no doubt that this economic downturn took a big bite out of many retirement saving nest eggs and rearranged the plans of millions of Americans of when they can retire, how they can retire, and even where they may retire. Over the coming weeks, we are going to touch briefly on some aspects of trying to rebuild your retirement nest egg in the most effective and efficient way. We won’t pretend to be stock market prognosticators or decide on the economic fate of the US economy, but we will try to educate you on your options and equip you with the right information to make informed decisions with your Financial advisement team, your CPA and Financial planners. Investing is hard enough without having all the information, so it is our goal to provide you with the tax laws and ramifications behind many of the retirement savings vehicles and techniques employed by your Financial planners and advisors.
We’ll start with some of the basics. Majority of retirement savings strategies call for individuals to hold their retirement assets and savings in tax-deferred or tax-free accounts as well as taxable accounts. There a few reasons for this. First, investing retirement funds in tax-deferred or tax-free accounts offers you the ability to grow your funds outside of the reach of the IRS until the funds are distributed to the owner of the account. However, these tax-deferred or tax-free accounts do have some shortcomings and additional taxable accounts are needed to maximize your savings and have a balanced approach to retirement. One such shortfall is that these accounts have an annual contribution limit depending on the type of account that will obstruct you from saving as much as you may need to in order to adequately provide for your retirement. Additionally, tax-favored accounts, generally, impose a penalty for “early withdrawals” from these accounts. These are two quick examples of why taxable accounts are needed in addition to tax-favored accounts in your retirement planning. Let’s take a brief look at taxable accounts and how they can factor into your overall tax picture.
Taxable Account Planning
I think we all might agree that losing money in the stock market is not the optimal choice; however, if it comes to pass, there are some positive tax ramifications for the taxpayer. This is pretty basic planning, but let’s review a few basics listed below and then briefly touch on a few examples.
• Unlike business losses, personal capital losses can only be carried forward. (Only
exception is in the case of a natural disaster. Contact your CPA if you feel you fall into
this category).
• If selling stocks, remember that your Losses can be used to offset your Gains. Short
term losses can be used valuably if timed correctly to offset any short term gains that
would otherwise be taxed ad your individual income tax bracket rather than the
preferred long term capital gain rate of 15%.
• If you sell stock and realize a net loss, it can be used to offset your wage income up to
$3,000 and the remainder is carried forward to the next year.
• Be careful with qualified dividends. They are taxed at the long-term capital gains rate;
however, capital losses (short and long) con only off-set them up to the $3,000 limit.
Example 1:
During 2009, James earned $60,000 from his job as a mechanic. He also sold a mutual fund he owned that resulted in a long term loss of $8,000. Additionally he sold stocks that resulted in a long term gain of $15,000, short term gain of $2,000 and $14,000 in short term losses. As a result of his sales in 2009, James realized a net $5,000 short term capital loss calculated as follows:
--$4,000 - $2,000 = $12,000 short term loss
--$15,000 - $8,000 = $7,000 long term gain
--$12,000 - $7,000 = $5,000 short term loss
Of this $5,000 short term loss, $3,000 may be used to offset his current income of $60,000 and $2,000 may be carried forward as a net short term capital loss into 2010.
Example 2:
During 2009, Samantha has qualified dividend income of $8,000 and a net long term capital loss of $10,000. The net long term capital loss can only offset $3,000 of the qualified dividend income; therefore, the remaining $5,000 of dividend income is taxed at a maximum rate of 15%. The balance of the long term capital losses, $7,000, is carried forward to 2010.
We’ll be back week to talk more about retirement and how taxability and tax deferral play a role in your decision making. On deck is annuities. Have a great week and as always, if you have any tax or accounting questions, we at McArthur & Co. would be glad to become your trusted tax advisor.
info@mcarthurco.com
704.544.8429
Tuesday, January 26, 2010
Tuesday, January 19, 2010
Get Ready, Get Set, Go...
Over the past several weeks, we have tried to provide you with as many tax saving and planning ideas and tips as possible and we will continue to do so in the weeks moving forward. However, today, let’s take a moment to step back and get ready for the onslaught of paperwork, and for some out there, the stress that so often is associated with tax season. Even if you have a CPA prepare your taxes for you, dealing with and organizing the paperwork can cause unneeded stress for individuals if they aren’t ready for it and properly prepared to handle it. At McArthur & Co, we provide our clients with Client Organizers to help with the process of getting your paperwork organized as it arrives allowing it to be passed on to the CPA without anything falling through the cracks or any sort of delay developing. What you’ll read today is not rocket science, but it can make your life less stressful if you’re willing to put some of these simple steps into practice.
• Have a Dedicated place for your Tax Related Information: The documents have begun to trickle in for some of you and the stream of paperwork is only going to increase. As these documents (W-2’s, 1099’s, etc.) come in the mail, don’t just casually place them to side to deal with later. Make it point to store these documents in one location so that you aren’t searching throughout your entire house to find that one 1099 that you know you opened but can’t seem to put your hands on.
• Useful Categories: In addition to have a dedicated location for all of your tax documentation, it is also helpful to categorize your information according how it works into your tax return. Here, you can get as specific as you’d like, but should at the very least have a folder for Income Items, Deductible Items, Charitable Contributions, Investments. When an item is received in the mail, open it up, take it to your dedicated location for storage and then place it in the applicable folder. When it comes time to pass it on to your CPA, you’re ready. If you’re preparing your taxes on your own, this will significantly cut down on the time you spend sorting through the paperwork.
• Know what you Need: Half the battle is simply knowing what information you need to have to complete your return. The below list is by no means comprehensive, but it provides a guideline of some common items that should be noted, recorded, and/or received/reported:
1. Original W-2 forms reporting wages, salaries and tips.
2. All 1099 forms for interest, dividends, miscellaneous income, state refunds, or
retirement income.
3. All year-end, December 31, 2009, brokerage statements showing investment
transactions and any accompanying brochures received related to mutual funds.
If you sold any stocks or bonds, then you will need the original purchase price
and date if not provided by the brokerage statement.
4. Schedule K-1 showing income from LLC, Partnerships, S corporations, estates,
and trusts.
5. Statements supporting deductions for mortgage interest and real estate and
personal property taxes (autos, boats, etc.).
6. Details of any out-of-pocket medical expenses, including medical insurance
premiums and long-term care insurance premiums. Don’t forget medical miles if
significant. Do not include amounts reimbursed to you.
7. A list of charitable contributions (be sure and note those that are non cash), and
don’t forget charitable mileage. NOTE: All contributions must be traceable to a
canceled check or credit card statement. This is in addition to required receipt
from organization for contributions of $250 or more.
8. Details regarding any possible tuition credit or education interest deduction
(1098-T).
9. Income and expenses related to any small business you might have.
10. Rental income and expenses related to any rental property you might have.
11. Did you make any contributions to any sort of Individual Retirement Account? If
so, make sure you have the details for the amount and the type of IRA (Roth,
deductible, or non deductible).
12. For any estimated taxes you might have paid know the amount paid, the dates
they were paid, and to whom they were paid.
The above three steps seem so very simple, but you would be surprised how often they are overlooked. The result is frequently undue stress, delays in filing returns, and inability for individuals to take full advantage of their tax saving opportunities. Take the time and make the effort to implement these three steps and you will have the ability to take control of tax season instead of tax season taking the control of you.
info@mcarthurco.com
704.544.8429
• Have a Dedicated place for your Tax Related Information: The documents have begun to trickle in for some of you and the stream of paperwork is only going to increase. As these documents (W-2’s, 1099’s, etc.) come in the mail, don’t just casually place them to side to deal with later. Make it point to store these documents in one location so that you aren’t searching throughout your entire house to find that one 1099 that you know you opened but can’t seem to put your hands on.
• Useful Categories: In addition to have a dedicated location for all of your tax documentation, it is also helpful to categorize your information according how it works into your tax return. Here, you can get as specific as you’d like, but should at the very least have a folder for Income Items, Deductible Items, Charitable Contributions, Investments. When an item is received in the mail, open it up, take it to your dedicated location for storage and then place it in the applicable folder. When it comes time to pass it on to your CPA, you’re ready. If you’re preparing your taxes on your own, this will significantly cut down on the time you spend sorting through the paperwork.
• Know what you Need: Half the battle is simply knowing what information you need to have to complete your return. The below list is by no means comprehensive, but it provides a guideline of some common items that should be noted, recorded, and/or received/reported:
1. Original W-2 forms reporting wages, salaries and tips.
2. All 1099 forms for interest, dividends, miscellaneous income, state refunds, or
retirement income.
3. All year-end, December 31, 2009, brokerage statements showing investment
transactions and any accompanying brochures received related to mutual funds.
If you sold any stocks or bonds, then you will need the original purchase price
and date if not provided by the brokerage statement.
4. Schedule K-1 showing income from LLC, Partnerships, S corporations, estates,
and trusts.
5. Statements supporting deductions for mortgage interest and real estate and
personal property taxes (autos, boats, etc.).
6. Details of any out-of-pocket medical expenses, including medical insurance
premiums and long-term care insurance premiums. Don’t forget medical miles if
significant. Do not include amounts reimbursed to you.
7. A list of charitable contributions (be sure and note those that are non cash), and
don’t forget charitable mileage. NOTE: All contributions must be traceable to a
canceled check or credit card statement. This is in addition to required receipt
from organization for contributions of $250 or more.
8. Details regarding any possible tuition credit or education interest deduction
(1098-T).
9. Income and expenses related to any small business you might have.
10. Rental income and expenses related to any rental property you might have.
11. Did you make any contributions to any sort of Individual Retirement Account? If
so, make sure you have the details for the amount and the type of IRA (Roth,
deductible, or non deductible).
12. For any estimated taxes you might have paid know the amount paid, the dates
they were paid, and to whom they were paid.
The above three steps seem so very simple, but you would be surprised how often they are overlooked. The result is frequently undue stress, delays in filing returns, and inability for individuals to take full advantage of their tax saving opportunities. Take the time and make the effort to implement these three steps and you will have the ability to take control of tax season instead of tax season taking the control of you.
info@mcarthurco.com
704.544.8429
Tuesday, January 12, 2010
The Current Homebuyer's Tax Credit
If you are in the market to buy a home this year, then pay attention to the new terms found in the extended version of the First-Time Homebuyer’s Tax Credit as it may open up the door for you to claim this credit even if this isn’t your first home.
We are going to highlight some of the basics first, many of which come straight from the IRS website as key points for taxpayers to know and follow. First, the IRS is in the process of revising Form 5405 – First-Time Homebuyer Credit, which must be filed in order to claim the Credit. The revisions are being completed to reflect the new provisions found in the extended version of the Credit. If you bought your home prior to Nov. 6, then you can still use the old version of Form 5405 to file your claim; any homes bought after Nov. 6 will have to wait until the revised Form 5405 is released. Additionally, the following are some key dates and qualifications to be aware of:
• First-Time Homebuyer – The details here have stayed pretty constant. To qualify as a First-Time Homebuyer you must meet the same qualifications as previous and you are still eligible to take a Credit of up to $8,000 for the purchase of your principal residence.
• On or Before April 30, 2010 – This is the key date to have purchased or to be entered into a binding contract to purchase a principal residence. If only entered into a binding contract, then you must close on the home on or before June 30, 2010.
• Claim Credit on 2009 or 2010 Return – For qualifying purchases in 2010, you will have the option of claiming the credit on either your 2009 or 2010 return.
• Long-time Resident now Eligible for Reduced Credit – You can qualify for the credit if you’ve lived in the same principal residence for any five-consecutive year period during the eight-year period that ended on the date the new home is purchased and the settlement date is after November 6, 2009. The maximum credit for long-time residents is $6,500. However, married individuals filing separately are limited to $3,250.
• Higher Incomes can now Qualify – The new law raises the income limits for homes purchased after November 6, 2009. The full credit is available to taxpayers with modified adjusted gross incomes up to $125,000, or $225,000 for joint filers.
• Purchase Price Limit – No Credit can be applied to the purchase of a home if the purchase price of that home exceeds $800,000.
One’s marital status has a huge effect on how and if the Credit can be claimed. If you have been recently married, divorced or have a pending marriage or divorce, then your situation may require a closer look and the availability of the credit could become difficult to determine. If you find yourself in one of these situations, then please contact your CPA for more information. There are a number of different scenarios to consider, but we are only going to touch on a few here today.
First, for those of you who have been through the process of a divorce, the marital home is considered your principal residence until the divorce is finalized. Therefore, you would need to wait three years from when the divorce was finalized in order to be eligible for the $8,000 portion of the credit. However, you may qualify for the $6,500 portion of the credit. This would be a good time to call your CPA to see exactly where your eligibility stands.
Next, let’s take a look at a newly married couple. Spouse #1 is a long term resident and is a current homeowner and Spouse #2 qualifies as a First-Time Homebuyer (according to the terms of the First-Time Homebuyer Credit) and they have decided to purchase a new principal residence together. In this situation, does this couple qualify for either the $8,000 credit or the $6,500? Rulings and guidance indicate that the answer here is No. To qualify for the First-Time Homebuyer tax credit, then both Spouse #1 and Spouse #2 would have to qualify as a First-Time Homebuyer; the same can be said for qualifying as a long term resident for the $6,500 credit. One question to ask in this situation is can Spouse #2 (the First-Time Homebuyer) amend their previous year return to be able to claim the credit? Contact your CPA as this requires a more in depth analysis of your personal situation.
Outside the realm of marital status, there is one further scenario we want to discuss. If you are a homeowner who qualifies as a “long term resident” for the purposes of claiming the $6,500 Credit, do you have to sell your home in order to qualify? The early answer is No. If you replace your current principal residence with a new principal residence, and if you meet all of the other qualifications, then you may be eligible to claim up to $6,500. The key here is that the new home you purchase is going to be your Principal Residence. It is not important what comes of your old home for the purposes of claiming the Credit.
If you are in the market for a home, please take time to consider whether or not you qualify for either the $8,000 or $6,500 version of the First-Time Homebuyer Credit. This can be complicated to consider, so please contact your CPA to see what your situation holds for your eligibility.
Please join us again next week as Tax season draws closer and we consider some steps you can take to be prepared.
info@mcarthurco.com
704.544.8429
We are going to highlight some of the basics first, many of which come straight from the IRS website as key points for taxpayers to know and follow. First, the IRS is in the process of revising Form 5405 – First-Time Homebuyer Credit, which must be filed in order to claim the Credit. The revisions are being completed to reflect the new provisions found in the extended version of the Credit. If you bought your home prior to Nov. 6, then you can still use the old version of Form 5405 to file your claim; any homes bought after Nov. 6 will have to wait until the revised Form 5405 is released. Additionally, the following are some key dates and qualifications to be aware of:
• First-Time Homebuyer – The details here have stayed pretty constant. To qualify as a First-Time Homebuyer you must meet the same qualifications as previous and you are still eligible to take a Credit of up to $8,000 for the purchase of your principal residence.
• On or Before April 30, 2010 – This is the key date to have purchased or to be entered into a binding contract to purchase a principal residence. If only entered into a binding contract, then you must close on the home on or before June 30, 2010.
• Claim Credit on 2009 or 2010 Return – For qualifying purchases in 2010, you will have the option of claiming the credit on either your 2009 or 2010 return.
• Long-time Resident now Eligible for Reduced Credit – You can qualify for the credit if you’ve lived in the same principal residence for any five-consecutive year period during the eight-year period that ended on the date the new home is purchased and the settlement date is after November 6, 2009. The maximum credit for long-time residents is $6,500. However, married individuals filing separately are limited to $3,250.
• Higher Incomes can now Qualify – The new law raises the income limits for homes purchased after November 6, 2009. The full credit is available to taxpayers with modified adjusted gross incomes up to $125,000, or $225,000 for joint filers.
• Purchase Price Limit – No Credit can be applied to the purchase of a home if the purchase price of that home exceeds $800,000.
One’s marital status has a huge effect on how and if the Credit can be claimed. If you have been recently married, divorced or have a pending marriage or divorce, then your situation may require a closer look and the availability of the credit could become difficult to determine. If you find yourself in one of these situations, then please contact your CPA for more information. There are a number of different scenarios to consider, but we are only going to touch on a few here today.
First, for those of you who have been through the process of a divorce, the marital home is considered your principal residence until the divorce is finalized. Therefore, you would need to wait three years from when the divorce was finalized in order to be eligible for the $8,000 portion of the credit. However, you may qualify for the $6,500 portion of the credit. This would be a good time to call your CPA to see exactly where your eligibility stands.
Next, let’s take a look at a newly married couple. Spouse #1 is a long term resident and is a current homeowner and Spouse #2 qualifies as a First-Time Homebuyer (according to the terms of the First-Time Homebuyer Credit) and they have decided to purchase a new principal residence together. In this situation, does this couple qualify for either the $8,000 credit or the $6,500? Rulings and guidance indicate that the answer here is No. To qualify for the First-Time Homebuyer tax credit, then both Spouse #1 and Spouse #2 would have to qualify as a First-Time Homebuyer; the same can be said for qualifying as a long term resident for the $6,500 credit. One question to ask in this situation is can Spouse #2 (the First-Time Homebuyer) amend their previous year return to be able to claim the credit? Contact your CPA as this requires a more in depth analysis of your personal situation.
Outside the realm of marital status, there is one further scenario we want to discuss. If you are a homeowner who qualifies as a “long term resident” for the purposes of claiming the $6,500 Credit, do you have to sell your home in order to qualify? The early answer is No. If you replace your current principal residence with a new principal residence, and if you meet all of the other qualifications, then you may be eligible to claim up to $6,500. The key here is that the new home you purchase is going to be your Principal Residence. It is not important what comes of your old home for the purposes of claiming the Credit.
If you are in the market for a home, please take time to consider whether or not you qualify for either the $8,000 or $6,500 version of the First-Time Homebuyer Credit. This can be complicated to consider, so please contact your CPA to see what your situation holds for your eligibility.
Please join us again next week as Tax season draws closer and we consider some steps you can take to be prepared.
info@mcarthurco.com
704.544.8429
Wednesday, January 6, 2010
Know Your Limits
We hope you all had a wonderful Holiday season and that your new year is off to a great start. Before we get into the heat of tax season, we want to make you aware of some 2010 limits and key figures as you start to do your 2010 planning.
Standard Mileage Rates
The IRS has 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
It might pay to do the math here because you always have the option of calculating the actual costs of using your vehicle rather than using the standard mileage rates.
Standard Deduction Amounts
The Standard Deduction amounts for 2010, with the exception of Heads of Households, will remain constant to the levels that were seen in 2009 and are as follows:
Married Filing Jointly -- $11,400
Heads of Households -- $8,400 (up from $8,350)
Single -- $5,700
Married Filing Separate -- $5,700
Personal Exemption
The personal exemption is also remaining at its 2009 level of $3,650.
FICA Wage Base
The Wage base remains frozen for 2010 at $106,800. The tax rates remains the same also, with self-employed individuals paying 15.3% on first $106,800 of net earnings and 2.9% on any amount above that. For those who fall outside of the self-employed category, your rates are the same; however, half is paid by your employer and half is paid by you.
Student Loan Interest Deduction
The maximum deduction for student loan interest is $2,500 and is phased out as follows:
Phased out on a Single return beginning at $60,000 and ending at $75,000.
Phased out on a Joint return beginning at $120,000 and ending at $150,000.
Lifetime Learning Credit
In order to claim the Lifetime Learning Credit, you must be paying qualified tuition and related expenses at a postsecondary educational institution and that institution must classified as an eligible educational institution. Unlike the Hope Scholarship Credit, students are not required to be enrolled at least half-time in one of the first two years of postsecondary education. The Modified AGI phase-out ranges are as follows for this credit:
Phase out on a Single return begins at $50,000 and ends at $60,000.
Phase out on a Joint return begins at $100,000 and ends at $120,000.
IRA Contributions
Various phase-out ranges apply to your Contributions, so please contact your CPA for more detailed advice. However, generally speaking, the maximum IRA contributions for Traditional and Roth IRA’s for 2010 are as follows:
Under Age 50 -- $5,000
Age 50 and Over --$6,000
Qualified Plan Contribution Limitations
Limits on what you can place into your Qualified Plans (401(K), profit sharing, defined benefit plans, etc) did not move from your 2009 limits and are as follows:
401(K) Elective Deferral:
Under Age 50 -- $16,500
Over Age 50 -- $22,000
SIMPLE Plan Deferral Amount:
Under Age 50 -- $11,500
Over Age 50 -- $14,000
Benefit Limit for Defined Benefit Plans:
All Ages -- $195,000
HSA High Deductible Health Plan
Many employees and self-employed individuals now take advantage of a Health Savings Account and if so should be aware of the following Limit changes in 2010 as follows:
Minimum Deductible
For Self-Only coverage -- $1,200
For Family coverage -- $2,400
Maximum Out-Of-Pocket Expenses
For Self-Only coverage -- $5,950
For Family coverage -- $11,900
Maximum Contribution Amount
For Self-Only coverage -- $3,050
For Family coverage -- $6,150
If an Individual is over the age of 55, add $1,000 to Contribution Amount limits.
Annual Gift Tax Exclusion
While Congress still debates some Estate and Gift tax law, one thing we do know is that the Annual Gift Tax Exclusion amount remains the same as 2009 at $13,000.
The above listed amounts represent just a sampling of some key limits and figures that you will need to know in order to plan for your 2010 tax year. If you have more specific questions or areas of interest, please reach out to us here at McArthur & Co or to your local CPA. Next week, we plan to take a look at the newest version of the First Time Homebuyer tax credit and how it opens up the door to more home buyers. If you’re in the real estate market, check back in and see if you can apply this opportunity to your buying situation.
info@mcarthurco.com
704.544.8429
Standard Mileage Rates
The IRS has 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
It might pay to do the math here because you always have the option of calculating the actual costs of using your vehicle rather than using the standard mileage rates.
Standard Deduction Amounts
The Standard Deduction amounts for 2010, with the exception of Heads of Households, will remain constant to the levels that were seen in 2009 and are as follows:
Married Filing Jointly -- $11,400
Heads of Households -- $8,400 (up from $8,350)
Single -- $5,700
Married Filing Separate -- $5,700
Personal Exemption
The personal exemption is also remaining at its 2009 level of $3,650.
FICA Wage Base
The Wage base remains frozen for 2010 at $106,800. The tax rates remains the same also, with self-employed individuals paying 15.3% on first $106,800 of net earnings and 2.9% on any amount above that. For those who fall outside of the self-employed category, your rates are the same; however, half is paid by your employer and half is paid by you.
Student Loan Interest Deduction
The maximum deduction for student loan interest is $2,500 and is phased out as follows:
Phased out on a Single return beginning at $60,000 and ending at $75,000.
Phased out on a Joint return beginning at $120,000 and ending at $150,000.
Lifetime Learning Credit
In order to claim the Lifetime Learning Credit, you must be paying qualified tuition and related expenses at a postsecondary educational institution and that institution must classified as an eligible educational institution. Unlike the Hope Scholarship Credit, students are not required to be enrolled at least half-time in one of the first two years of postsecondary education. The Modified AGI phase-out ranges are as follows for this credit:
Phase out on a Single return begins at $50,000 and ends at $60,000.
Phase out on a Joint return begins at $100,000 and ends at $120,000.
IRA Contributions
Various phase-out ranges apply to your Contributions, so please contact your CPA for more detailed advice. However, generally speaking, the maximum IRA contributions for Traditional and Roth IRA’s for 2010 are as follows:
Under Age 50 -- $5,000
Age 50 and Over --$6,000
Qualified Plan Contribution Limitations
Limits on what you can place into your Qualified Plans (401(K), profit sharing, defined benefit plans, etc) did not move from your 2009 limits and are as follows:
401(K) Elective Deferral:
Under Age 50 -- $16,500
Over Age 50 -- $22,000
SIMPLE Plan Deferral Amount:
Under Age 50 -- $11,500
Over Age 50 -- $14,000
Benefit Limit for Defined Benefit Plans:
All Ages -- $195,000
HSA High Deductible Health Plan
Many employees and self-employed individuals now take advantage of a Health Savings Account and if so should be aware of the following Limit changes in 2010 as follows:
Minimum Deductible
For Self-Only coverage -- $1,200
For Family coverage -- $2,400
Maximum Out-Of-Pocket Expenses
For Self-Only coverage -- $5,950
For Family coverage -- $11,900
Maximum Contribution Amount
For Self-Only coverage -- $3,050
For Family coverage -- $6,150
If an Individual is over the age of 55, add $1,000 to Contribution Amount limits.
Annual Gift Tax Exclusion
While Congress still debates some Estate and Gift tax law, one thing we do know is that the Annual Gift Tax Exclusion amount remains the same as 2009 at $13,000.
The above listed amounts represent just a sampling of some key limits and figures that you will need to know in order to plan for your 2010 tax year. If you have more specific questions or areas of interest, please reach out to us here at McArthur & Co or to your local CPA. Next week, we plan to take a look at the newest version of the First Time Homebuyer tax credit and how it opens up the door to more home buyers. If you’re in the real estate market, check back in and see if you can apply this opportunity to your buying situation.
info@mcarthurco.com
704.544.8429
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