Tax Bytes

 

For Use in Preparing 2009 Returns

• AMT Exemption
  • $70,950 (MFJ)
  • $46,700 (Single)
• Passenger Auto Depreciation: $3,060

• I.R.C. §179
  • $250,000
  • Start of phase-out: $800,000
• Special Use Valuation:
  • Max. reduction: $1,000,000
  • Max. tax savings (45% rate): $432,000
  • Formula interest rate (Agribank District): 6.50% (for deaths in 2009)
• I.R.C. §6166
  • First $1,330,000 of taxable estate
  • 2% portion - $1,273,500
• Social Security:  
  • Wage base: $106,800
  • Earnings Limit: (Age 62-66): $14,160
    

Standard Mileage Rates:

• Business: 55 cents/mile (2009)
• Medical/Moving: 24 cents/mile
• Charitable: 14 cents/mile  (2009)

For Use in Preparing 2010 Returns

• Summary of Rates, Tables and Often Used Items (PDF)

 

Other Tax Information

IRS Releases 2009 Special Use Valuation Interest Rates

July 27, 2009 - The IRS has released the 2009 interest rates for special use valuation elections made on federal estate tax returns for decedent's dying in 2009.

2009 Maximum Depreciation Allowances for Autos and Trucks

(§280A rules - applicable to cars costing over $14,800)

Rev. Proc. 2009-24

» Bonus Depreciation Not Taken

• 1st Tax Year: $2,960
• 2nd Tax Year: $4,800
• 3rd Tax Year: $2,850
• Each succeeding tax year: $1,775

» Bonus Depreciation Taken (New Car)

• 1st Tax Year: $10,960
• 2nd Tax Year: $4,800
• 3rd Tax Year: $2,850
• Each succeeding tax year: $1,775

» Trucks & Vans (No Bonus Taken)

• 1st Tax Year: $3,060
• 2nd Tax Year: $4,900
• 3rd Tax Year: $2,950
• Each succeeding tax year: $1,775

» Trucks & Vans (Bonus Taken)

• 1st Tax Year: $11,060
• 2nd Tax Year: $4,900
• 3rd Tax Year: $2,950
• Each succeeding tax year: $1,775
  
  

November 2009 AFRs:
• 0.71 % (short-term)
• 2.59 % (mid-term)
• 4.01 % (long-term)

December 2009 AFRs:
• 0.69 % (short-term)
• 2.64% (mid-term)
• 4.17 % (long-term)

Interest Rates for Underpayments and Refunds

1st quarter 2009 (Rev. Rul 2008-54)

 Non-Corporate taxpayers: 5%

Corporate Taxpayers:
- 4% for overpayment
- 5% for underpayment

Large Corporate Underpayments (amount exceeding $10,000): 7%

Large Corporate Overpayments: 2.5%

 

2nd quarter 2009 (Rev. Rul 2009-7)

 Non-Corporate taxpayers: 4%

Corporate Taxpayers:
- 3% for overpayment
- 4% for underpayment

Large Corporate Underpayments (amount exceeding $10,000): 6%

Large Corporate Overpayments: 1.5%

 

3rd Quarter 2009 (Rev. Rul. 2009-17)

Non-Corporate taxpayers: 4%

Corporate Taxpayers:
- 3% for overpayment
- 4% for underpayment

Large Corporate Underpayments (amount exceeding $10,000): 6%

Large Corporate Overpayments: 1.5%

4th Quarter 2009 (Rev. Rul. 2009-27)

Non-Corporate taxpayers: 4%

Corporate Taxpayers:
- 3% for overpayment
- 4% for underpayment

Large Corporate Underpayments (amount exceeding $10,000): 6%

Large Corporate Overpayments: 1.5%

IRS Developments

 

• IRS Provides Guidance on 2009 Required Minimum Distribution Waiver Rule - September 25, 2009

• Additional Clarification Of Tax Questions Provided - Updated Sept. 4, 2009 – The IRS has provided some additional answers to questions concerning the first-time homebuyer credit and disaster assistance.  Hat tip to Kristy Maitre.

• IRS Provides Guidance On How To Depreciate Ethanol Plant Assets - August 25, 2009 – IRS has issued a Notice of Proposed Revenue Ruling concerning the depreciation treatment of tangible assets at ethanol plants.  Comments are due by November 23, 2009.

• Deduction For Purchase of New Car Available in States Without Sales Tax - June 11, 2009 - The IRS says that the deduction for the purchase of a new car contained in recent legislation is available in states not having a sales tax.

• IRS Announces HSA Contribution Limits for 2010 - May 18, 2009 – The IRS has announced that the contribution limits for health savings accounts have increased for 2010.

• IRS Ruling and Announcement of Importance - April 17, 2009 - The IRS has issued a Revenue Ruling on differential wage payments for military personnel and an announcement on Ford hybrid vehicles.

• Potpourri of Recent IRS Information Letters – April 13, 2009 - The IRS Chief Counsel's Office has issued several information letters of application to practitioners with agricultural clients.
  

• IRS Says Credit and Debit Card Fees For Tax Payments Are Deductible - April 8, 2009 - In a recent news release, IRS now says that credit and debit card fees associated with payment of federal tax are deductible.

• IRS Says that Trademarks and Trade Names Can Qualify As Like-Kind Property - March 24, 2009 – In a recent Technical Advice Memorandum, the IRS has said that trademarks and trade names can be like-kind with other trademarks and trade names.

• IRS Says Interest Deduction Limitation on Acquisition Indebtedness Applies on a Per-Mortgage Basis - March 23, 2009 - The IRS has recently noted that the $1 million limitation on acquisition indebtedness applies on a per-mortgage basis and is used to determine the portion of an individual's interest payments that may be deducted.

• IRS Elaborates on First-Time Homebuyer Credit - January 21, 2009 – The IRS has issued guidance on how to allocate the first-time homebuyer credit between unmarried persons that buy homes.

• IRS Clarifies Employee Retention Credit For Disaster Areas - January 21, 2009 – The IRS has clarified the extent of the usefulness of the Employee Retention Credit for businesses impacted by the Midwestern floods in 2008

• IRS Elaborates on First-Time Homebuyer Credit - January 21, 2009 – The IRS has issued guidance on how to allocate the first-time homebuyer credit between unmarried persons that buy homes.

• Stimulus Payment Calculators - December 23, 2008 - The IRS is preparing two types of online calculators for use in computing the 2008 Economic Stimulus Payments and the Rebate Recovery Credit.

• IRS Proposed Regulations Modifying Circular 230 Practice Standards - Updated November 2008

• IRS Issues New Rules on Preparer Penalties - Updated November 2008 - The IRS has issued Proposed Regulations concerning preparer penalties.

• Special Use Valuation and Recapture Tax - October 6, 2008 - The IRS has ruled that a proposed sale of special use elected land for a purpose that would ensure the land be permanently used for agricultural purposes triggers recapture tax.    

• IRS Announces Areas Eligible For Extended Period for Livestock Sold Because of Drought - September 30, 2008 - The IRS has issued a Notice listing the counties where the replacement period for livestock sold because of drought is extended.

• IRS Says Farmers Can Automatically Convert From Accrual Method To Cash Method - September 11, 2008 - The IRS has issued a Revenue Procedure that allows farmers to automatically change from accrual to cash accounting.

• IRS Announces Special Use Valuation Interest Rates For Deaths In 2008 - August 11, 2008 - The IRS has officially released the interest rates by Farm Credit Bank District for Deaths in 2008 for use when making a special use valuation election for federal estate tax purposes.

• IRS Releases Data on Burden of Income Tax - September 3, 2008 - IRS data shows that burden of income tax on wealthy has increased

• IRS Confirms That Non-Deductible Life Insurance Premiums Do Not Increase Amount That S Corporations That Were Once C Corporations Can Distribute Tax-Free - September 26, 2008

• IRS Proposes To Change Filing Extensions for Some Types of Returns - July 1, 2008

• Iowa Storm, Tornado Victims Eligible for Disaster Relief - July 15, 2008 - The Federal Government has declared several Iowa counties a presidential disaster area.  That means that special tax rules apply.

• IRS Releases Publication on Charitable Contributions - (PDF) - The IRS has released Publication 1771 which explains the general rules and specifications for documenting charitable deductions.  The Publication also explains new guidelines that allow charities to send documentation to donors electronically and outlines when an acknowledgement from a charitable organization is required for the donor to claim a tax deduction. 

• IRS Releases Publication Containing Guidance for Charitable Donations of Vehicles - (PDF) - The IRS has released Publication 4303 which provides general guidelines for taxpayers who donate their vehicles to charity.

• IRS Issues Final Regulations That Clarify Rules For Stock and Asset Transfers After a Reorganization - May 8, 2008 - The IRS has amended regulations issued last fall concerning stock and asset transfers following a corporate reorganization.

• IRS Issues Notice 2008-46 - Guidance on Preparer Penalties - (PDF)

• IRS Issues Coordinated Issue Paper on Tax Treatment of Bioenergy Program Payments - The IRS has issued a Coordinated Issue Paper that says that Bioenergy Program payments are includible in gross income.

• IRS Fact Sheet on Like-Kind Exchanges - The IRS has published a summary of the rules for I.R.C. §1031 exchanges (tax-deferred exchanges).

• Treasury Releases Tax and Economic Data - On January 4, 2008, the Treasury Department released its most recent data concerning tax revenue and the economy.
  

• IRS Fiscal 2007 Audit Data - The IRS has released its fiscal year 2007 data on audit and enforcement.

• IRS Whistleblower Office Exempt From Privacy Act - An interim regulation specifies that the IRS Whistleblower Office will be Exempt from the Privacy Act.  That has implications for subjects of investigation.

• IRS Says that Insurance Companies Must Develop Anti-Money Laundering Programs
  An IRS Final Rule effective January 11, 2008, subjects insurance companies and dealers in precious metals to anti-money laundering requirements.

• IRS 2007 Data Book Released - On March 14, 2008, the IRS released the 2007 IRS Data Book (IRS Pub. 55B), which provides an annual snapshot of IRS activities for Oct. 1, 2006 - Sept. 30, 2007.  The publication includes information about returns filed, tax collections, enforcement, taxpayer assistance, as well as the IRS budget and workforce.