Facts
and Figures
Timely Points of Particular Interest
Higher Per Diems. The IRS recently announced an increase in the worry-free “per diem rates” for business travelers. Under the method used for travel in specified high-cost areas, the rate increased by $19 to $256 a day. For all other locations (i.e., the low-cost areas), the stated rate rose to $158 a day, an increase of $6. The new per diem rates officially went into effect for business travel beginning on October 1, 2008.
Social Security Tax. It should come as no surprise that Social Security tax is going up again. The wage base for 2009 is $106,800 (up from $102,000 for 2008). But the tax rate on wages up to the amount of this threshold remains at 6.2 percent. Also, the 1.45 percent Hospital Insurance portion of the tax continues to apply to all wages. These tax rates are doubled for self-employment tax purposes, but a self-employed individual can deduct half of the tax.
Required
Minimum Distributions. Generally, taxpayers 70-1/2 years of age or older
must take “required minimum distributions” from IRAs and qualified
retirement plans such as 401(k)s each year. However, a new law passed late
last year—the Worker, Retiree and Employer Recovery Act of 2008—suspends
this requirement for 2009. More related information will be forthcoming.
Student Loans. In a new case, a lender discharged $3,000 of a
consolidated student loan because the borrower had made timely payments for
three consecutive years. But the waiver did not qualify as a tax-free gift,
nor did the borrower qualify for any special tax law exception. Result: The
Tax Court said the $3,000 forgiveness of debt constituted taxable income.
Please
contact a Somerset advisor
if you have specific questions relating to any of these topics.
Wherewithal
is provided by Somerset for our clients and other interested persons
upon request. Since technical information is presented in generalized
fashion, no final conclusion on these topics should be made without
further review. For additional information on the issues, please
contact
a member of the firm. Somerset provides total financial solutions,
including accounting, assurance, information solutions, litigation &
valuation, tax, wealth management and management consulting services to
entrepreneurs and their businesses. This document is not intended or
written to be used, and cannot be used, for the purpose of avoiding tax
penalties that may be imposed on the taxpayer.
Somerset CPAs,
P.C.
3925 River Crossing Parkway, Third Floor
Indianapolis, Indiana 46240
317.472.2200 • 800.469.7206 • FAX 317.208.1200
www.somersetcpas.com
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