The Internal Revenue Service announced two taxpayer updates this week.
The first is an extension of the Attributed Tip Income Program, which was first instituted during 2006 and originally set to expire on Dec. 31.
The ATIP program, in which employers who participate report the tip income of employees based on a formula using a percentage of gross receipts, has been extended through Dec. 31, 2011.
To enroll, employers check the designated box on Form 8027. Employees who work for a participating employer can elect to be part of ATIP by signing an agreement with their employer to have tip income computed and reported as wages.
Also, beginning Jan.1 the standard mileage rates for the use of a vehicle will be:
The standard mileage rate for business, down from 2009′s rate of 58 cents per mile, is based on an annual study of the fixed and variable costs of operating an automobile, the IRS said in a statement.
Taxpayers are also advised not to use the business mileage rate for a vehicle after using any depreciation method under the Modified Accelerated Cost Recovery System or after claiming a Section 179 deduction for that vehicle.