Lightner & Stickel CPAs, Inc.- Valued by our clients.

Last Updated December 31, 2009

Standard Mileage Rate for 2010

The standard mileage rate for 2010 is 50 cents per mile for business driving. The new rate was effective January 1, 2010. Reimbursements that exceed 50 cents per mile will be taxed as income to the recipients and will be subject to payroll taxes as well.

Medical travel and moving standard mileage rate decreased to 16.5 cents per mile for 2010.

The allowance for charitable driving remains at 14 cents per mile for 2010.

Retirement Plan Contribution Limits for 2010

The contribution limits for retirement plans for 2010 are as follows:

401k

401k for Taxpayers

Over 50

IRA’s

IRA’s for Taxpayers

Over 50

SIMPLEs

SIMPLEs for Taxpayers

Over 50

Limit

$16,500

$22,000

$5,000

$6,000

$11,500

$14,000

Worker’s Compensation Group Rating Class

The Bureau of Worker’s Compensation has adopted a new policy for all participants of the 2009 – 2010 group discount program with claims between January 1, 2007 and December 31, 2008. There will be a mandatory 2 hour safety training class. This class must be completed before June 30, 2010, to continue participating in the group rating program. The classes will be offered in various locations through out the state and online. If you fall under this new requirement and the Administrator of your group has not contacted you about attending classes, please contact our office for assistance in meeting this requirement.

Social Security Limits for 2010

	2010
Maximum Earnings:
Subject to:
Social Security Tax	$106,800.00
Medicare Tax	No Limit
Rate of Tax
Employee
Social Security Tax	6.20%
Medicare Tax	1.45%
Self Employed*
Social Security Tax	12.40%
Medicare Tax	2.90%
Maximum Tax Paid By:
Employee
Social Security Tax	$6,621.60
Medicare Tax	No Limit
Self Employed*
Social Security Tax	$13,243.20
Medicare Tax	No Limit
* Does not reflect deduction of ½ SE Tax.

Sales and Use Tax Changes

Ohio’s continued participation in the Streamlined Sales and Use Tax Agreement brings some changes to the way sales of tangible personal property and taxable services are sourced affective January 1, 2010. Sourcing does not determine the taxability of the sale; it determines the location of the sale for sales tax purposes and therefore the appropriate jurisdiction’s tax rate.

Sales of Tangible Personal Property – will source their sales to Ohio consumers to the location where the vendors receive the orders from the consumer. Vendors that previously switched to destination sourcing for delivery sales under previous Ohio law will be required to source their sales to the location where the order is received rather than the delivery location. Vendors that make sales in Ohio, but do not make sales from a fixed location will continue to source each sale to the location where the sale takes place. For remote sales made by Ohio vendors to Ohio consumers, the sale will be sourced to the location where the order is received. Sales made by Ohio vendors that the vendors sends or delivers to non-Ohio customers will continue to be treated as sales in interstate commerce and not subject to Ohio tax. Sales by out-of-state sellers to Ohio consumers will be sourced to the location where the consumer receives the tangible personal property that was sold.

Sales of services should be sourced to the location where the consumer receives the service.

Vendors of tangible personal property that converted to destination sourcing under prior Ohio law and received compensation for making the change may be eligible for compensation for converting back to origin sourcing.

Leases of tangible personal property did not change. Generally, leases are sourced to the primary property location of the property at the time the tax is to be paid.

Direct pay permit holders should continue to report as provided in their direct pay agreement.

Sub S-Corporations

The IRS is starting to look at S-Corporation legal status of some companies. The acceptance letter you receive upon approval of your S elections is an important document for proof of approval. When you receive approval, make several copies of the acceptance letter and send a copy to your attorney, accountant, and keep a couple copies for yourself. If the IRS can not find a copy in their files, the burden of proof is on you. If you can not prove your S status, the IRS can make you re-file your past tax returns as a C-Corporation. This change in tax filing will also affect all of the partner’s personal tax returns.

Transfer of Business Ownership

With the affects of the downturn in the economy on your current profits and the five year average profits, 2010 may be a good year to have a valuation done on your business to transfer ownership to heirs. The lower value of the business may allow you to transfer a greater number of shares of ownership saving some gift or estate taxes.

Tax Information Release Form

Before any tax return information can be disclosed to any third party or used for any purpose other than filing the return, a consent form must be filled out prior to release of the information. We have forms available to be filled out in our office or we can fax the form to you; which you would fill out, sign, and fax back to us. Unless a set time period for the duration of the consent is stated, the consent is valid for a maximum of one year.