Taxes, Lawyers, Business & Debt
Main Tax Law Changes
There were a few notable changes to the United States tax code for the 2009-2010 tax year. In this brief guide, you will learn what they are and how they can affect the amount you pay to the government.
This year, the Social Security maximum wage stayed the same, but the IRS' standard mileage deduction for business-purpose driving declined. And, several previously available depreciation deductions are out for this year, unless they are voted back in by Congress. There was no annual increase in Social Security for this year, and withholdings did not change. For this year, the maximum Social Security wage is $106,800, the same as last year. America's Social Security Administration says that various cost-of-living indicators did not show the need for increased benefits for 2010. These changes do not affect Medicare, which comes with no maximum deduction. Withholdings for Social Security remain at 6.2%, and Medicare holds steady at 1.45%, for a total of 7.65% deducted from every paycheck.
The deduction amount that the IRS allows for business, moving or medical driving has been lowered for 2010, to 50 cents per business mile, and 16.5 cents per mile for moving or medical purposes. Those driving for charitable purposes can deduct 14 cents per mile. Certain business assets that came with a depreciation deduction are no longer eligible, unless the depreciation amounts are reinstated by Congress. For instance, the higher amount of a Section 179 depreciation ($250,000) is gone, dropped to $134,000 for assets bought and used in 2010. There was a fifty percent bonus for the first year's depreciation, but that has vanished as well, and depreciation on hybrid vehicles is not available for those bought and put in service this year.