2010 Contributions & Allowances

2010 Retirement plan contribution limits

Traditional or Roth IRA $ 5,000

(if 50 or older on December 31) $ 6,000

SIMPLE-IRA $ 11,500

(if 50 or older on December 31) $ 14,000

401(k), 403(b) and 457 plans $ 16,500

(if 50 or older on December 31) $ 22,000

Deductible IRA contribution amounts may be reduced or eliminated if you (or your spouse) are covered by a “qualified retirement plan”. In 2010 there are income limitations for making Roth IRA contributions even if you are not covered by a qualified plan.

Traditional-to-Roth IRA conversions: In 2010 there are no income limitations and the federal tax on converted amounts may be paid in over two years. Please see our post “IRA Conversion to Roth IRA” in the “Current Tax News” tab regarding this change.

SEP-IRA

25% of eligible compensation up to $ 49,000.
2010 Mileage rates

Business mileage 50 cents per mile

Medical or Moving mileage 16.5 cents per mile

Charitable mileage 14 cents per mile.

2010 Social Security tax rates and wage limits

FICA portion of tax is 6.2% (.062) on the first $ 106,800 earned

(maximum tax = $ 6,621.60)

Medicare portion of tax is 1.45% (.0145) with no limit

(all wages are taxed).

Federal Minimum Wage

Remains at $ 7.25 per hour as of December 31, 2009.

North Carolina’s minimum wage is the same as federal. Some states have their own rate (check with the state Department of Labor).

Some types of pay (i.e. tipped employees) are exempt or have special rules.