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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

	2009	2010
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 $ 8,350 $ 166,800	$ 11,400 $ 5,700 $ 8,400 None
Personal and dependency exemptions Phase-out’s: Married/Joint Single Head of Household Married/Separate	$ 3,650 $ 250,200 $ 166,800 $ 208,500 $ 125,100	$ 3,650 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	$3,500,000	No Estate Tax
Annual gift exclusion	$ 13,000	$ 13,000
Top federal estate and gift tax rate	45%	0% estate; 35% gift
Standard mileage rate	55¢	50¢
Qualified businesses may expense newly acquired eligible business equipment (section 179 deduction)	$ 133,000	$ 134,000

Additional Notes:

Depending on your income, and other factors, it may be prudent to roll over your regular IRA to a Roth.

First time homebuyer credit and a new long-time resident credit will be available for home purchases through 4/30/10.

In 2010, a credit of up to $1,500 may be available for making energy saving improvements to your home, such as putting in extra insulation or installing energy saving windows.

2010 estate tax rate is 0%. However, Congress may take action this year to make 2009 estate, gift and GST tax rates permanent. It is possible that any change will be retroactive to 1/1/2010.

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