The Whitlock Company, CPAs and Consultants, Springfield Missouri

Low inflation contributed to a five cents drop in the standard business mileage reimbursement rate for 2010. Effective January 1, 2010, the standard business mileage rate will be 50 cents-per-mile, which is a drop from 55- cents-per-mile in 2009. The standard mileage rate for moving costs and medical expenses will also decline in 2010. The only mileage rate remaining the same is the rate for the charitable deduction, which is set by statute.

In a major address in Washington, D.C. in December, IRS Commissioner Douglas Shulman described the agency’s priorities for 2010 and beyond. As expected, the IRS chief promised that the agency would crack down on tax evasion, especially by wealthy Americans. Shulman also indicated that the IRS may explore joint audits with other tax authorities

Before 2010 begins in earnest, you may find it helpful to take one last look at important tax developments that occurred during 2009 to see what impact they may have on next year’s tax strategies. To help, we have prepared a list of 2009 tax developments, selected from the perspective of their importance to you in 2010. Some of the developments on the list are ongoing, with endings yet to be written. With other developments, the law is firmly established, although application of some of them to New Year transactions may remain somewhat uncertain. In all cases, they are notable for their potential to play an important role in 2010 and beyond.

Although the Senate approved its massive health care reform bill, the Patient Protection and Affordable Care Act, Congress begins 2010 with a mountain of unfinished tax legislation from 2009. The unfinished tax bills mean practitioners and taxpayers face uncertainty, at least for the immediate future, over important issues such as estate tax, the alternative minimum tax (AMT), health care reform, and more. Some of these bills are on the fast-track for approval in early 2010; others will wait for Congress to finish work on higher priority items.

Two expanded home energy credits are available to help homeowners lower both their winter heating bills as well as their 2009 tax bill, the IRS is reminding taxpayers. The nonbusiness energy property credit and the resident energy efficiency property credit can both be claimed by eligible homeowners when filing their 2009 federal income tax return. The credits are available when you itemize your deductions or take the standard deduction

December is poised to be an important month for federal tax legislation as members of Congress work to finalize heath care reform, a possible jobs bill and more before the new year. Their ambitious agenda may keep lawmakers in Washington, D.C. beyond their scheduled mid-December holiday recess.

Employees can elect to make voluntary contributions from their salary to certain retirement plans. The type of plan may depend on your employer. Many employers maintain cash or deferred arrangements — 401(k) plans — as part of their defined contribution retirement plan. State and local governments can maintain “457″ eligible deferred compensation plans.

The Worker, Homeownership, and Business Assistance Act of 2009 (2009 Worker Act), enacted November 6, 2009, gives all businesses (or their owners in the case of pass-through entities) an opportunity to obtain a quick refund from the IRS using net operating losses (NOL). A company has an NOL when its business deductions for the year exceed its business income. Normally, a business can only carry back an NOL two years. But the new law allows any business to elect to carry back its NOLs from 2008 or 2009 for up to five years, regardless of form (corporation, individual, estate or trust) and size. (Partnership and S corporation NOLs flow through to partners and shareholders and can’t be carried over by the entity.)

2009 is quickly coming to a close but there is still time to possibly maximize your federal tax savings for the year. Many year-end tax planning techniques can help you save money. Because of the recession, some of the year-end strategies take on added urgency for individuals affected by a job loss or a reduction in income.

There is an interesting new rollover opportunity that’s coming up in a few months. After 2009, you will be able to roll over amounts in qualified employer sponsored retirement plan accounts, such as 401(k)s and profit sharing plans, and regular IRAs, into Roth IRAs, regardless of your adjusted gross income (AGI). Currently, individuals with more than $100,000 of adjusted gross income as specially modified are barred from making such rollovers.