The smell of flowers is in the air… cupid is close at hand… it must be a new year (I’m doing ballet in my office right now – but NO leotards – they ride up)

And with the new year, come some changes and indexes on some of the common deductions and benefits offered by the IRS.  Without further delay, here they are:

1.  The gift tax exclusion on gifts to individual recipients increased from $12k in 2008 to $13k in 2009 (it’s double that if you file a joint tax return and chose to combine your gift).  So give your money away up to $13k per individual, just don’t leave your CPA behind.

2.  There is a new deduction floor for nonbusiness casualty losses you’ll have to deduct on your individual tax return (caused by sudden, unexpected and unusual events).  If you lose on a casualty loss, first deduct what you got back from the insurance company, then deduct the new 2009 dollar floor amount of $500 to get to the deductible portion of the casualty loss.

3.  On January 1, 2009 the mileage rate dropped to 55 cents/mile.  It was weird in 2008:  From 1/1/08 to 6/30/08 it was 50.5 cents/mile, and from 7/1/08 to 12/31/08 it was raised to 58.5 cents/mile (when providing data to your CPA, remember to give them the mileage for the first half of the year, and then the mileage for the last half of the year).

4.  The social security wage base raises to $106,800 for 2009.  This is the base your employer uses to determine how much of your wages to tax at 6.2%.  It comes out of your paycheck each week, or you pay it in yourself if you’re self-employed.

5.  You can put up to $5,950 into your HSA account this year (if you have family coverage).

Thanks, Jason M. Blumer

IRS Circular 230 Disclosure: To ensure compliance with requirements imposed by the IRS, we inform you that (i) any U.S. 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 avoiding penalties under the Internal Revenue Code; (ii) any such tax advice is written in connection with the promotion or marketing of the matters addressed; and (iii) if you are not the original addressee of this communication, you should seek advice based on your particular circumstances from an independent advisor.