Finance News & Insights

20 tax changes Finance needs by year-end

As if your departments didn’t have enough to do before Dec. 31, IRS has issued a slew of updates for the new year. No worries — you’ll find them all here.

So you can be confident your staffers have everything you need the minute Jan.1 arrives, we’ve assembled the latest IRS and Social Security Administration changes your organization needs in a one-stop shop:

Update 1: Taxable wage base

Payroll will need to update its systems to account for changes to the taxable wage base.

The 2009 taxable wage base will be $106,800, according to the Social Security Administration. That’s a $4,800 increase over 2008’s wage base.

Info: www.ssa.gov/pressoffice/pr/2009cola-pr.htm

Update 2: Pension plan limits

Benefits will also have some updating to do. IRS just announced its 2009 pension plan limits.

Some of the highlights your organization may need:

  • annual benefit under a defined benefit plan: $195,000 ($10,000 more than in 2008)
  • the limitation on the exclusion for elective deferrals: $16,500 (a $1,000 increase)
  • defined contribution plans under Section 415(c)(1)(A): $49,000 (a $3,000 jump)
  • SIMPLE retirement accounts: $11,500 (a $1,000 increase), and
  • Section 457(e)(15) for nonprofits: $16,500 (another $1K jump).

The definition of key employee in a top-heavy plan is $160,000.

Cite: IRS Notice 2008-108, www.irs.gov

Update 3: Standard mileage rate

Don’t want to leave out Accounts Payable. It has the unpleasant task of telling employees they’ll get less for every business-related mile they drive in 2009.

The 2009 standard mileage rate is 55 cents per mile. That’s down 3.5 cents from the rate for the second half of 2008.

As for the other mileage rates:

  • 24 cents per mile for medical or moving purposes (also down), and
  • 14 cents per mile in service of charitable organizations (unchanged).

Info: IR-2008-131, 11/24/08, at www.irs.gov

Update 4: Transportation fringe benefits

There are other commuter-related benefits your company can offer that come with new limits for the new year:

The 2009 transportation fringe benefit limits are:

  • $230 for qualified parking expenses (vs. $220 last year), and
  • $120 for mass transit and vanpooling (up $5 over 2008).

Update 5: Adoption Assistance

Companies that help their employees out financially when they adopt a child have additional new limits to rely upon.

For 2009, the maximum aggregate amount per child you can provide an employee for adoption assistance is $12,150. That’s up from the $11,650 you could offer in 2008.

Note: The available adoption limit begins to phase out for employees based on their income. This year, the phase-out begins with modified adjusted gross income in excess of $182,180 and phases out entirely for employees with modified adjusted gross income of $222,180.

Update 6: Health Savings Account (HSA) limits

If your organization is using that winning combination of a high-deductible health plan and a health savings account (HSA) to control costs, here’s what you’ll need to know.

The maximum annual HSA contribution for 2009:

  • $3,000 for an eligible individual with self-only coverage, and
  • $5,950 for family coverage.

The maximum annual out-of-pocket amounts for high deductible health plans (HDHP):

  • $5,800 for self coverage, and
  • $11,600 for family coverage.

The minimum deductible for HDHPs:

  • $1,150 for self-only coverage, and
  • $2,300 for family coverage.
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  • I was looking forward to all the 20 changes for 2009 but you only gave 6. What are the others?
    thanks

  • PEGGY

    I see 6 changes, what about the other 14?

  • Dorrie

    Ah. 6 updates, multiple changes within the updates add up to 20. Could probably have added Update 1a, b etc. to make it a bit clearer. And I really don’t have this much time on my hands – just happened to notice it!

  • Bob H

    I think they are counting each change in the 6 categories.
    Update 1: Taxable wage base – 1 change
    Update 2: Pension plan limits – 6 changes
    Update 3: Standard mileage rate – 2 changes
    Update 4: Transportation fringe benefits – 2 changes
    Update 5: Adoption Assistance – 3 changes
    Update 6: Health Savings Account (HSA) limits – 6 changes
    Total 20 changes

  • Brandi

    I too am wondering where we can find the remaining 14 changes that aren’t listed here…thanks

  • Dee

    I thought there were 20 tax changes. There are only 6 in the article. Will you share the other 14 with your readers?

  • Where are the remainder of the changes. If we can not view here, where can we find them??

  • Donna

    I see 6 changes, what about the other 14?

  • Rose Marie

    Thank you for the information. Though I know most of them it is very useful to have them outlined and summarized the way it is presented here.

    I am looking forward to receiving the remaining 14 tax updates.

  • Can you please let us know where to find the other 14 changes?

    Thanks a bunch and have a great day.

  • DEBBY

    I also would like a copy of the other 14.

  • Akber Panjwani

    The way I see it, there are six updates by the IRS having a total of 20 changes within these updates.

  • Jennifer Azara

    To clarify, the current story contains all 20 changes, grouped into six updates.

    Sorry for any confusion.

    Jennifer Azara
    Editor
    CFO Daily News

  • What happend to the other 14 changes, you stated you have them all?

  • Angela

    Thank you very much for all of the changes. Makes my job a whole lot easier!

  • Alice Stile

    Please tell me how i can get all the updates and keep informed as others become available???
    thanks
    alice

  • Pat Charlton

    Thanks for the important information. But, I do would like to know where the other 14 updates are as well.

    Thanks

  • L K Snider

    Doesn’t anyone read the posts of other contributors?

    There are 20 changes categorized into the 6 updates. None are missing.