What's New?   $250,000 FDIC Insurance Coverage to Continue Through 2013   On May 20th, legislation was passed extending the temporary increase of the FDIC insurance coverage of up to at least $250,000 per depositor through December 31, 2013. On January 1, 2014, the standard insurance amount will return to $100,000 per depositor for all account categories except for IRAs and other certain retirement accounts which will remain at $250,000 per depositor. This temporary coverage was previously set to expire at the end of 2009.   New Law Waives Required Minimum Distributions for 2009   A new law enacted in late 2008 provides that retirement plan account participants, IRA owners, and their beneficiaries do not have to take RMDs for 2009. This means that taxpayers who can take advantage of this change won't be forced to sell stock or mutual fund shares held in retirement accounts when their value is exceptionally depressed.   Increase in Estate Tax Exemption   The federal estate tax exemption for 2009 is $ 3.5 million (up from $ 2 million last year). For 2010, the federal estate tax is scheduled to be repealed and then to revert to the old exemption amount of $ 1 million for 2011. However, it now seems very clear that the promised repeal won’t happen. The more likely scenario is that we will continue to have a federal estate tax for 2010 and beyond with an exemption around the current $ 3.5 million figure, but nobody knows for sure. Therefore, planning to avoid or minimize the federal estate tax should still be part of your overall financial game plan. We hope to have more certainty about the rules that will apply for 2010 and beyond before year-end.    In any case, reducing the size of your estate by making annual gifts continues to be a tax-smart strategy. The annual gift tax exclusion has been increased to $13,000 for 2009. The gift tax exclusion is the amount the IRS allows a taxpayer to gift to another individual without reporting the gift or using any of the lifetime exemption.   Cash for Clunkers   The President recently signed legislation into law that gives a cash incentive for individuals and businesses to trade in older gas-hogging vehicles for new, more fuel efficient ones. The incentive takes the form of a voucher of $3,500 to $4,500 depending on the type of vehicle traded in and the fuel efficiency of the vehicle purchased. The new vehicle would have to be purchased between July 1 and November 1 of 2009.   Standard Mileage Rates Reduced for 2009   Effective January 1, 2009, the standard mileage rate for business purposes decreased from 58.5 cents per mile to 55 cents per mile. That can add up to a significant tax deduction but you have to keep written records that can prove the business purpose for miles claimed. If you forget to note the mileage for a particular trip, you can easily calculate by using the Google map feature for directions. For frequently used destinations, just keep a list of the roundtrip mileage and you don’t have to note the odometer start/end mileage readings. You also need to keep track of the TOTAL miles put on the vehicle(s) from January 1 through December 31. The easiest way to do this is by noting your odometer reading at the end of each year and then you only need keep track of actual business miles (also, keep track of "commuting" miles if you regularly commute to a worksite as an employee). For personal deductions, the medical (e.g., doctor visits) and moving mileage rates have decreased to 24 cents per mile. The mileage rate for charitable purposes remains at 14 cents per mile. Partnership and Fiduciary Extensions   For Forms 1065 (U.S. Return of Partnership Income), Forms 1041 (U.S. Income Tax Return for Estates and Trusts), and Forms 8804 (Annual Return for Partnership Withholding Tax (Section 1446) that are due to be filed after Dec. 31, 2008, the automatic extension period has been reduced from 6 months to 5 months.  For tax returns required to be filed after Dec. 31, 2008, the minimum penalty for a failure to file a tax return within 60 days of the due date (including extensions) is the lesser of $135 (increased from $100) or 100% of the amount of tax required to be shown on the return.    Florida’s Minimum Wage   Florida’s minimum wage is $7.21 per hour, effective January 1, 2009. This is up from the $6.79 per hour minimum wage in 2008. The employers of “tipped employees” must pay a direct wage equal to the minimum wage ($7.21) minus the 2003 tip credit ($3.02), or a direct hourly wage of $4.19 as of January 1, 2009.  Florida’s minimum wage is  more than the current federal minimum wage, but Florida's wage will increase again when the Federal minimum wage increases to $7.25 per hour on 07/24/09.