Tips & Tidbits At Hughes, Snell & Co., P.A., we know that an informed client is our best customer. And the Internet is a great education resource, with endless amounts of information just a click or two away.  But sometimes it's nice to have help sorting through the virtual noise and clutter, so we've composed a few helpful tips and tidbits of information. Check back often, for all the latest information on ways to manage your business and personal financial needs more effectively. IRS Releases 2010 Business Mileage Rates Beginning on January 1, 2010, the new mileage rate for business mileage will be $.50 per mile.  This is a slight reduction intended to reflect lower transportation costs.  Medical mileage is also reduced to $.165 per mile and the mileage rate for charitable endeavors is unchanged at $.14 per mile.   Worker Verification Rule Here…Ready or Not Effective September 8, 2009, a rule goes into effect requiring federal contractors to use the E-Verify system to screen applicants for illegal immigrant status. E-Verify is administered by the U.S. Department of Homeland Security and is used to check the immigration status of both the current and prospective employees. There is legislation pending in Congress that would expand this requirement to all employers. Certain Computer Technology Purchases Allowed for 529 Plans Computer Technology is added to the list of college expenses (tuition, books, etc.) that can be paid for by a qualified tuition program (QTP), commonly referred to as a 529 plan. For 2009 and 2010, the law expands the definition of qualified higher education expenses to include expenses for computer technology and equipment or Internet access and related services to be used by the designated beneficiary of the QTP while enrolled at an eligible educational institution. Software designed for sports, games or hobbies generally does not qualify.   Tax Credit for First Four Years of College Improves on Current Education Credits The American opportunity credit is designed to help parents and students pay part of the cost of the first four years of college. The new credit modifies the existing Hope credit for tax years 2009 and 2010, making it available to a broader range of taxpayers, including many with higher incomes and those who owe no tax. Tuition, related fees, books and other required course materials generally qualify. Many of those eligible will qualify for the maximum annual credit of $2,500 per student.   Energy-Efficient Home Improvements Can Save At Tax Time The credit for non-business energy property is increased for homeowners who make qualified energy-efficient improvements to existing homes. The law increases the rate to 30 percent of the cost for all qualifying improvements and raises the maximum credit limit to a total of $1,500 for improvements placed in service in 2009 and 2010. Qualifying improvements include the addition of insulation, energy-efficient exterior windows and energy-efficient heating and air conditioning systems. Notice to Employers Regarding Florida Minimum Wage Hike The Florida minimum wage is $7.21 per hour, with a minimum wage of at least $4.19 per hour for tipped employees, in addition to tips. Florida's new minimum wage is in effect as of January 1, 2009 until July 23, 2009. On July 24, 2009, the new Federal minimum wage of $7.25 will replace Florida's minimum wage. Annual Gift Limit Increased The annual gift tax exclusion amount increased to $13,000 for 2009 and remains the same for 2010. You may give relatives or others up to $13,000 each without gift tax consequences.       Justice Department Sets Tax Fraud Priority The Justice Department has set employment tax fraud as a leading enforcement priority. This will undoubtedly rear more payroll tax audits and IRS enforcement as well as increased penalties, and even tax liens. This will make proper payroll compliance even more important.   Independent Member:   Facebook                      LinkedIn                  Twitter   Telephone:  (239)939-2233                       Email:  accting@hughessnell.com FAX:  (239)939-0554 1470 Royal Palm Square Boulevard Fort Myers, FL 33919  IRS Circular 230 Disclosure:  In order to ensure compliance with IRS Circular 230, we must inform you that any U.S. tax advice contained in this transmission and any attachments hereto is not intended or written to be used and may not be used by any person for the purpose of (i) avoiding any penalty that may be imposed by the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any tax-related matter(s) addressed herein. This website is best viewed at a screen resolution of 1024 x 768 or higher.