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.
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.