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CUTRARA & COMPANY

CERTIFIED PUBLIC ACCOUNTANTS & CONSULTANTS

Competent and Caring Professionals Since 1972

OFFICES

16272 Prince Drive

South Holland, IL 60473-3233

Phone: 708.339.0500

Fax: 708.339.3271

330 South Michigan Avenue, Suite 1612

Chicago, IL 60604-1417

Phone: 312.447.0500

Outside Chicagoland: 888.288.7272 (888.CUTRARA)

What's New for 2010

	2010	2011
Retirement Plan Contribution Maximum employee pretax 401(k) or 403(b) 50 and over catch-up – 401(k) or 403(b) IRA and Roth IRA contribution limit 50 and over catch-up (IRA and Roth IRA)	$ 16,500 $ 5,500 $ 5,000 $ 1,000	$ 16,500 $ 5,500 $ 5,000 $ 1,000
Annual addition limit for defined contribution plans Maximum compensation that can be considered for a defined contribution plan	$ 49,000 Max. $ 245,000	$ 49,000 Max. $ 245,000
Social Security wage base	$ 106,800	$ 106,800
Social Security earnings limit Under full retirement age At full retirement age	$ 14,160 No Limit	$ 14,160 No Limit
Standard deductions Married/Joint Single Head of Household Deductions may be reduced when adjusted gross income (AGI) exceeds	$ 11,400 $ 5,700 $ 8,400 None	$ 11,600 $ 5,800 $ 8,500 None
Personal and dependency exemptions Phase-out’s: Married/Joint Single Head of Household Married/Separate	$ 3,650 None None None None	$ 3,700 None None None None
Child tax credit	$ 1,000	$ 1,000
Long-term capital gains – holding period 12 months or less (top tax rate) More than 12 months (top tax rate) Depreciation recapture on real estate (top tax rate) Collectibles & certain small business stock (top tax rate)	35% 15% 25% 28%	35% 15% 25% 28%
Federal estate tax exemption	No Estate Tax	$5,000,000
Annual gift exclusion	$ 13,000	$ 13,000
Top federal estate and gift tax rate	0% estate; 35% gift	35%
Standard mileage rate	50¢	51¢
Qualified businesses may expense newly acquired eligible business equipment (section 179 deduction)	$ 500,000	$ 500,000

Additional Notes:

The initial due date for 2010 individual income tax returns is April 18, 2011.

Brokers must start reporting cost basis information, beginning with securities purchased in 2011.

In 2011, medicine and drugs must be prescribed by a doctor to be qualified for HSA's, MSA's, and HRA's.

Bonus depreciation of 100% is available for property placed in service after 9/8/2010 and before 1/1/12.

Effective after 12/31/10, most businesses must use the Electronic Tax Payment System (EFTPS) to make federal tax payments.

Taxpayers who are age 70 1/2 or older can make qualified charitable distributions tax-free to a charity from an IRA of up to $100,000. This rule is available for transfer made before 1/1/12.

This is a good time to review your estate documents (will, trust, power of attorneys).

INCOME TAX RATE SCHEDULES - 2010

SINGLE

Taxable Income Over But Not Over		The Tax is:		Of the Amount Over
$ 0	8,375	......................	10%	$ 0
8,375	34,000	837.50	15%	8,375
34,000	82,400	4,681.25	25%	34,000
82,400	171,850	16,781.25	28%	82,400
171,850	373,650	41,827.25	33%	171,850
373,650	.............	108,421.25	35%	373,650

MARRIED FILING JOINTLY

Taxable Income Over But Not Over		The Tax is:		Of the Amount Over
$ 0	16,750	......................	10%	$ 0
16,750	68,000	1,675.00	15%	16,750
68,000	137,300	9,362.50	25%	68,000
137,300	209,250	26,687.50	28%	137,300
209,250	373,650	46,833.50	33%	209,250
373,650	.............	101,085.50	35%	373,650