2010 and 2011 Annual limits and rates for Fica tax, Social Security tax, maximum pension & 401K deductions contributions, reimbursed mileage rate, depreciation, self-employed heath, insurance deduction, gift tax and corporate tax rates. QuickBooks help and training for small business. QuickBooks help and training for small business.
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   2010 & 2011
Fica Tax Rates and Tax Limits
All the Important tax limits on one page

 


   
 

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Free: 2011 tax calendar (download pdf file)


Payroll tax Social Security Fica and Futa Limit

 

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2010 FICA Tax (941 Tax) limit  - Fica Limit

NEW RATE FOR 2011
                         
FICA rate for Employees is 4.2% (NOT 6.2%)  FICA  Rate for Employers is 6.2%
                                 Medicare remains at 1.45% for both Employers and Employees

Social Security tax includes FICA 6.2% and Medicare 1.45%. The FICA tax limit (Social Security) changes annually. The Medicare tax has no limit.  Employer FICA tax and Employee FICA have the same limits. Both FICA tax rate (6.2%)  and Medicare tax rate (1.45%) as a rule do not change. In addition to FICA tax limit and Social Security Limit, other tax limits and tax rate (s) can be found on this webpage.

2010 Medicare Wage Base limit         


2010 Social Security Wage Base limit

2011 Social Security Wage Base limit

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Unlimited


$106,800 2010

$106,800 2011

Wow...in 2002  the limit was $87,000! That is  $1,514 more in tax that the employee must pay and $1,514 more in tax paid by the employer!

FUTA Tax (940) limit

2010 Federal Unemployment limit

$   7,000

Shortcuts, tips, resources  for payroll taxes and human resources

QuickBooks Payroll

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Credit card companies will be reporting credit card sales by merchants to the IRS beginning in 2011 on Form 1099-K. Click here to view a draft of the 1099-K to see what will be reported.

 

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2010 Mileage Rate 

Click here for IRS source  2010 business mileage on a vehicle
                                          2011 Business mileage on a vehicle

Interesting article on what auto expense is deductible
2010 Mileage- Business rate
2011 Mileage - Business rate
$ .50 per mile (50 cents)
$ .51 per mile  (51 cents)
2010 Mileage- Charity rate
2011 Mileage - Charity rate
$ .14  per mile (14 cents)
$  .14 per mile

2010 Milage -Medical and Moving Rate
2011 Milage - Medical and Moving Rate

$ .165  per mile   (16.5  cents) 
$  .19  per mile   (19 cents)


Payroll tax rules Part A  and Part B  for employees or owners using a company vehicle

Revenue procedure 2009-54 (year 2010) detailed discussion on rules under which the amount of ordinary and necessary expenses of local travel or transportation away from home are deemed substantiated .

Need prior year rates? Click below
2009 rates and limits - Social Security, Mileage, Pension, 401K, IRA
2008 rates and limits - Social Security, Mileage, Pension, 401K, IRA
2007 rates and limits - Social Security, Mileage, Pension, 401K, IRA

2006 rates and limits - Social Security, Mileage, Pension, 401K, IRA
2005 rates and limits - Social Security, Mileage, Pension, 401K, IRA

2004 rates and limits - Social Security, Mileage, Pension, 401K, IRA
2003 rates and limits - Social Security, Mileage, Pension, 401K, IRA

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2010 Maximum contributions and limits to pensions, IRA, and 401 K

Click here for official source for:  
2010 limitations

2011 limitations

Take control of your finances!

Choosing a retirement plan

2010 Maximum employee 401K contribution limit
 




2010 $16,500 +$5,500 (over age 50)
2011 $16,500 +$5,500 (over age 50)

2010 Catch up contribution Limit  (over age 50)

 

$ 5,500  (2010)
 included in above

$ 5,500 (2011)
 included in above

2010 Employer contribution to 401K is limited          

2010 total additions (employer contribution plus employee contribution) cannot exceed lesser of :

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Up to 25% of compensation

2010 $49,000 or 100% of compensation
           $54,500 for over age 50


 

2010 Maximum Annual Compensation limits  for determining benefits or contributions under  a qualified plan  (401(a)(17), 404(l), 408(k)(3)(C), & 408(k)(6)(D)

Note:  for  (2010) definition of a key employee in a top heavy plan is $160,000

      
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$  245,000    (2010)
 
 

2010 Maximum Annual Defined Contribution- Employer Contributions for 2010 to an employee SEP-IRA cannot exceed the lesser of  the following amounts:

 

2010 Simplified Employee Pension
Employers contribution for employees is  based on the  plan document, which cannot be more restrictive than including all employees who performed services for the employer in the last 3 of 5 years with earnings greater than:

Employees covered under collective bargaining employees & certain nonresident aliens may also be exclude.

Special rules apply to the self-employed. See publication 560 (www.irs.gov) for a worksheet on how to calculate a 2009 SEP contribution for a self employed Schedule C Filer.  For the  worksheet, click here.

Learn more- The ABCs of SEP Plans
Checklist- are you in compliance with IRS SEP rules and regs? Pdf


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25% of the employee's W2 compensation
( up to $245,000 2010 and 2011)
         or
$   49,000   (2010) (and 2011)



$      550   (2010) (and 2011)
    
  

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2010 Simple Retirement Account (Simple IRA)
Maximum Pretax Employee contribution




Learn more- The ABCs of Simple Plans
Checklist- are you in compliance with IRS Simple rules and regs? Pdf




$    11,500     (2010)
      
+ over age 50 catch up

The employer contributes up to 3% of W2 wages which is in addition to the Employee deferral max above (Maximum ER contribution is $11,500)

2010 Simple Catch up Deferral (over age 50)

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$   2,500 ( 2010)
      

 2010 Limit to  Traditional IRA, nondeductible IRA, or Roth IRA.   
 Who can contribute





$    5,000 + over age 50 catch up
    

Hidden Financial Risk
Understanding
Off-Balance Sheet Accounting

What went wrong and how to fix it

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Explains  methods by debt is hidden and the failure by management and auditors and investors  to detect and eliminate these tools of deception

 

IRA Catch up Deferral (over age 50)

$     1000  (2010 and 2011)

Learn about small business pensions

Retirement Plan Navigator

Resource for CPAs and retirement plan administrators

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How retirement income is taxed (pdf)

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2010 Maximum Earnings for Retirees

2010 Maximum retirement earnings before Social Security benefits are reduced
(One dollar in benefits will be withheld for every $2 in earnings above the limit)

Retirement Age from 65 to 67 depending upon Year of Birth

Normal Retirement Age Year of birth Age
1937 and prior 65
1938 65 and 2 months
1939 65 and 4 months
1940 65 and 6 months
1941 65 and 8 months
1942 65 and 10 months
1943-54 66
1955 66 and 2 months
1956 66 and 4 months
1957 66 and 6 months
1958 66 and 8 months
1959 66 and 10 months
1960 and later 67

Over
 Retirement Age

Under Age:

2010 under full retirement age reduction begins

The year an individual reaches retirement age:
2010 reduction begins
Apples only to earnings for months prior to attaining full retirement age. $1 in benefits will be withheld for  ever $3 in earnings above limit


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unlimited earnings permitted - no reduction


earnings over $ 14,160 ($1180/mo)




earnings over $37,680/yr (3140/mo)
In the year the individual reaches full retirement age, earnings  months prior to attaining full retirement age - One dollar in benefits will be withheld for every $3 in earnings above the limit of  $37,680 (2010)


Minimum Wage hourly rates

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Link to a chart of all States Minimum Wage rates
Federal minimum wage 

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2010 Corporation and Individual Tax Rates

Individual Rates        Original 2010 source

  • $ 5,700 2010 Standard deduction for Single

  • $ 5,700 2010 Standard deduction for Married filing separate

  • $ 8,400 2010 Standard deduction for Head of household

  • $11,400 2010 Standard deduction for Married filing Joint

Exemption amount 2010 $3,650

2010 Deduction for personal exemption phase out begins :
**2010 Phase out: The phase out of the personal exemption amount under 151(d)(3) does not apply to any taxable year beginning after December 31, 2009, and before January 1, 2011.
Accordingly
personal exemption phaseouts ended. For 2010, taxpayers with AGI above a certain amount will no longer lose part of their deduction for personal exemptions and itemized deductions.

2010 Deduction for itemized deductions phase out begins when
AGI Threshold
2010 Phaseout: The overall limitation on itemized deductions under 68 does not apply to any
taxable year beginning after December 31, 2009, and before January 1, 2011.
Accordingly,
 itemized deduction phaseouts ended. For 2010, taxpayers with AGI above a certain amount will no longer lose part of their deduction for personal exemptions and itemized deductions.

             

Click here to view IRS website containing these 2010 rates

For tax forms and extensions to file individual tax returns click here

2010 Tax Rates

2010 Individual Tax  Rates 10% 15% 25% 28% 33% 35%

Single

  8,375 next  25,625
to 34,000
next 48,400 to 82,400 next 89,450
to 171,850
next 201,800
to 373,650
amounts over
 373,650

Head Of Household

11,950

next 33,600
to 45,550
next 72,100
 to 117,650
next 72,900
to 190,550
next 183,100 to 373,650 amounts over
373,650

Married Joint

16,750

next 51,250
to
68,000
next 69,300
 to 137,300
next 71,950
to 209,250
next 164,400 to 373,650 amounts over
 373,650

Click here to view IRS website containing these rates

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Click here for: 2010 Corporate Rates
 
 
 

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Gift Tax

Federal gift tax exclusion-
click on annual exclusion
Taxable gifts count as part of the $1 million you are allowed to give away during your lifetime before you must pay Gift Tax.
These exclusions do not count towards the $1 million.
 

2006-2008 Estate Tax Applicable Exclusion Amount

2009  Estate Tax Applicable Exclusion Amount

2010 Estate Tax - No tax therefore no exclusion- This may change retroactively!

2011 Estate Tax Exclusion Amount


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$    13,000 (2010 and 2011)
    

 

$2,000,000


$3,500,000

None

$1,000,000  tax on the rest is 55%


Health Savings Accounts (HSA)

High Deductible Health Plan and Contribution Limits

2010 limits   2011 limits
Maximum HSA Contribution Limit   Minimum Policy Deductible Annual out-of- pocket does not exceed
2010 & 2011
Self -only coverage annual deductible
$3050 $1,200 $5,950
2010 & 2011
Family coverage annual deductible
$6150 $2,400 $11,900

2010 Over Age 55 Catch up contribution is $1000 (not mentioned in the 2011 documentation attached here )  

Individuals who are eligible individuals on the first day of the last month of the taxable year (December for most taxpayers) are allowed the full annual contribution (plus catch up contribution, if 55 or older by year end), regardless of the number of months the individual was an eligible individual in the year. For individuals who are no longer eligible individuals on that date, both the HSA contribution and catch up contribution apply pro rata based on the number of months of the year a taxpayer is an eligible individual.

Beginning in 2011 over the counter medications cannot be paid with HSA dollars

If you withdraw funds from an HSA before age 65 and used those funds for purposes other than qualified medical expenses there is a penalty tax of and additional 10%. In 2011 that penalty increases to 20%.

Learn more about Health Savings Accounts and administrative requirements
 
 
What new taxes and tax credits come with the new Healthcare bill??  

Employers health care tax credit - If you have 10 or fewer workers with average salaries of $25,000 and pay at least 50% of
health care premiums, your credit will be 35% of the premiums paid.  But small businesses with more than 25 employees or pay average annual wages of over $50,000 will not qualify for a credit. Click here to read the rev proc 2010-44 ruling on how to calculate the tax credit.

03/22/10 Healthcare bill will be funded in part by the wealthy. Click here to read the Amendment - Start reading at page 88
Nice summary of the bill and the amendment by ria.thomsonreuteres.com

For years after 2010 employers will have to disclose the value of the benefit provided by them for each employee's health insurance on the W-2 Form. An Excise tax will be imposed on high-cost employer sponsored health coverage. The tax will be levied at the insurer level.

For tax years after 12/31/2012 A surtax labeled "Additional Hospital Insurance Tax (HI). Hospital insurance benefits in Medicare are funded by payroll taxes on wages and self-employment income. Workers and employers each pay 1.45% for a total of 2.9% medicare tax, which is collected on the workers entire earnings.  A 0.9% surtax on wages and self employment income  in excess of Modified adjusted gross income over the Threshold amount limit ($250,000 Joint Returns, all others $200,000) will be assessed.

For tax years after 12/31/2012 3.8%  surtax of the lesser of Net Investment income or excess of Modified adjusted gross income over the Threshold amount limit ($250,000 Joint Returns, all others $200,000)
Net Investment income  -Sum of:

  • Interest, dividends, annuities, rents (does not include distributions from qualified retirement plans)

  • Income from a trade or business (described in paragraph 2)- Passive activity, business  trading in financial instruments, Income on investment of working capital

  • Gain from sales of disposition of property (other than property held in business)

For tax years after 12/31/2012 FSA (flexible spending account) new limit is $2500. Currently there is no limit.

 

 
   

Travel Reimbursement Rules for Lodging, Meals & Incidental Expenses

 
See Revenue Ruling for details on flat rate reimbursement plans

Meals while away on business
50% deductible
 

 

 
Depreciation

2010 Limit  $134,000  (This may change!!)
2010 Limit Section 179 $250,000  (
3/11/10 Bill  HR 2847)

2010 and 2011 Limit Section 179 $500,000 (Small Business Jobs Act)

New or used property qualifies, leased property usually does not qualify

The amount of investment qualifying for this immediate deduction begins to phase out for small businesses with investment in excess of $800,000  $2,000,000

Regs now permit Section 179 on off-the-shelf software


Elect to deduct $5000 start-up & $5000 organizational expenses in the year the business begins.
Effective for expenses incurred after 10/22/04. Be sure to read more on the details of this rule.
Deductions reduced by the amount of which the cumulative cost of start-up or organizational expenditures exceed $50,000 respectively

 Luxury Auto depreciation rules:
A car is defined as a four-wheel passenger automobile designed for use on public roads and is rated at 6,000 pounds or less unloaded gross vehicle weight

 
1st year depreciation limit
 $3060  (2010)

($11,060 for automobiles for which the special depreciation allowance applies)

Caution. These limits are reduced if the business use of the vehicle is less than 100%
Special use vehicles (over 6000lbs loaded) now exempt from luxury auto rules and can be deducted under section 179 SUVs (over 6000lbs)
 

Heavy Trucks & Vans

  read more

Not updated for 2010 limits



Not updated for 2010 limits

Publication 946 has a nice table for limits on depreciation of vehicles

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Statute of Limitations

3 years from tax period due date or 3 years from date original return received whichever is later
unless the taxpayer fails to include on a return any information with respect to a listed transaction
then the statute of limitations will not expire before 1 year after the Secretary is furnished with the information.
See more-Statute of Limitations guidelines
see also
How long should you retain your receipts and business documents
 

Tax Tips from the IRS

 

    Click to view tax tips at www.IRS.Gov

 
IRS Circular 230 Disclosure: To ensure compliance with requirements imposed by the IRS, we inform you that, any U.S. federal tax advice contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding any tax related penalties that may be imposed on you or any other person under the Internal Revenue Code or (ii) promoting, marketing, or recommending to another party any transaction or matter addressed in this communication
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