by: Jeffrey Quinn
You've heard that one before, right? At least within the last year or so?
Anyway, there are a few things in the tax world which have already changed with the turn of the calendar. Some good, some not so good. F'rinstance:
- Many of you have heard all about the so-called "Bush tax cuts" from years back, which strove to gradually mitigate and eventually repeal the estate tax. So, 2009 brings the penultimate year of the Bush tax cut era, wherein the estate tax exemption rises to a hefty $3.5 million. That means any 2009 decedent can bequeath up to this number free of estate tax; a married couple tallies $7.0 million in toto. Of interest on this point is the fact that the Big "O" has suggested his interest in "permanentizing" the estate tax situation at this same number--if his plan sticks, future decedents with estates of $3.5 million or less can count on no estate tax being levied on their kids.
- And while we're on the subject of transfer taxes, the annual gift tax exclusion has risen to $13,000 for 2009 gifts. Give that amount or less to any number of potential donees, and fear no gift tax, no gift tax return filing requirement, no problems whatsoever.
- Savers (Are there any of you out there?) who contribute to 401(k) plans can stash away an additional $1,000 (from a maximum of $15,500 in 2008 to $16,500) in 2009. And if you're over 50, stuff a total of $22,000 this year into that retirement savings plan.
And at least one more goodie from Bush, as he heads for the Texas flatlands:
IRA owners who are 70-1/2 or older can skip the otherwise mandatory annual distribution in 2009--a small token of his esteem for those whose IRAs have been hammered in the recent horrible investment markets, and who should not have to be forced to liquidate IRA investments in a very down market.
And let us not overlook recent conciliatory moves by the IRS itself, with respect to their interest in "working with" beleaguered taxpayers who just don't have the dough to meet their tax obligations. IRS Commish Doug Shulman was recently heard to state that IRS agents are being given new authority to go easy on folks who are suffering in these economic times. "We need to recognize that it's an extraordinary, challenging time," quoth Shulman. "We need to understand the taxpayers' perspective. We need to walk a mile in their shoes."
How cuddly. Between Shulman and the loose reign which Congress seems to want to hang out for the Treasury Secretary-Elect (Geithner) himself, it just makes a taxpayer want to cry, doesn't it?
CONSULT YOUR TAX ADVISOR - This article contains general information about various tax matters. You should consult your CPA regarding the implications to your own particular situation. Jeff Quinn, the author of this article, is a shareholder in Ashley Quinn, CPAs and Consultants, Ltd., with offices in Incline Village and Reno. He is also a contributor to the recently published twelfth edition of Tax Savvy for Small Business, published by Nolo. He can be reached at 831-7288, and welcomes comments at
jquinn@ashleyquinncpas.com.
