The Whitlock Company, CPAs and Consultants, Springfield Missouri

It appears unlikely that Congress will pass any transfer tax reform in 2010. As a result, 2010 could be the best of times for gifting by affluent clients. Part I of this article on gifting in 2010 by noted author and planning expert John J. Scroggin considered the multiple factors that encourage making gifts this year. Part II covered select gift planning opportunities available this year. Part III of the article, below, covers 2010 strategies and planning for terminally ill clients.

The following is a summary of the most important tax developments that have occurred in the past three months that may affect you, your family, your investments or your business.

Q. I spend 20 hours every week cooking meals and delivering them to an organization that feeds the hungry and homeless. Am I entitled to a deduction for my time and the food I pay for out of my own money?

At the start of 2010, Congress had a full tax agenda. As summer approaches, many tax bills remain unfinished, most notably an estate tax bill. Other important tax legislation is also on Congress’s agenda for action before year-end. Including: Estate tax, Individual tax rates, Capital gains and dividends, Child tax credit and more.

Wasting little time in helping important business hiring, the IRS has released forms and instructions for the employer tax breaks in the Hiring Incentives to Restore Employment (HIRE) Act. The IRS unveiled new Form W-11, Employee Affidavit, which covered employees can use to certify that they meet the criteria of the HIRE Act.

It also revised Form 941, Employer’s Quarterly Federal Tax Return, and Forms W-2, Wage and Tax Statement, and W-3, Transmittal of Wage and Tax Statements, to reflect the HIRE Act.

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