Philadelphia Wage Tax Decrease

The Philadelphia Wage/Earnings Tax rate for taxable compensation for January 1, 2010 through June 30, 2010 will be as follows:
 

   Residents of Philadelphia - 3.9296% (.039296)

   Non-Residents                - 3.4997% (.034997)

Individual Tax Preparation Checklist

Before you prepare your 2009 income tax return, go through the following checklist. Not every category will apply to you, so just pick those that do, and make sure you have that information available.

http://turbotax.intuit.com/microsite/tax-tools/tax-tips/tax-planning-and-checklists/5572.html?priorityCode=3468346206

2010 Tax Refund Cycle

The updated schedule is currently available on our website. You can also find the links to check the status of your refund. Go to http://www.mhccpa.com/FAQ.html#D2

Standard Auto Mileage Rate

The standard mileage rate for business mileage in 2009 and 2010 are 55 and 50 cents per mile, respectively. A taxpayer computes a deduction using the business standard mileage rate on a yearly basis, in lieu of computing the fixed and variable automobile costs allocable to business purposes, such as depreciation, lease payments, maintenance and repairs, tires, gasoline, oil, insurance, and license and registration fees. However, the taxpayer may continue to claim separate allowable deductions for parking fees and tolls, interest relating to the purchase of the automobile, and state and local personal property taxes.

High Earners – Open the Roth backdoor

The full benefits of a Roth IRA, in which you make after-tax contributions but withdraw income tax-free at retirement, are normally limited to families that are less than $166,000 a year ($105,000 for individuals). In 2010, though, Congress will open a backdoor. Anyone can convert a traditional IRA to a Roth and get a shelter from the tax hikes that are probably coming in future years.

So if you pass the income limit, contribute the full $10,000 (for a couple under 50) to a nondeductible IRA in 2009 – and convert it in 2010. At conversion, you’ll have to pay ordinary income tax on any growth in the account. But you can average those payments over two years. Half the tax will be due in 2011, and the remaining half will be payable in 2012.