Notable Tax Law Changes
- Business mileage deduction was 51 cents per mile from January 1, 2011 until June 30, 2011. On July 1, 2011, the rate increased to 55.5 cents per mile.
- Effective Jan 1, 2011, the cost of an over-the-counter medicine or drug cannot be reimbursed from Flexible Spending Arrangements or health reimbursement arrangements unless a prescription is obtained. The change does not affect insulin.
- Health coverage for an employee’s children under 27 years of age is now generally tax free to the employee. These changes immediately allow employers with cafeteria plans to permit employees to begin making pre-tax contributions to pay this expanded benefit.
- The Internal Revenue Service has extended help to more innocent spouses by eliminating the two year time limit that previously applied to certain relief requests.
- For tax year beginning 2010, the maximum section 179 expense deduction is generally $500,000. This limit is reduced by the amount by which the cost of sec 179 property placed in service during the year exceeds $2 million.