1. If your company maintans a flexible spending account (FSA), health reimbursement account (HRA), or health savings account (HSA), these plans will no longer be able to reimburse over-the-counter medications on a tax-free basis. The only exception will be for doctor-prescribed over-the-counter medications. Thus, your company will need to officially revise the terms of your plan and communicate the new terms to employees. Starting next year, the current 10 percent penalty on non-medical reimbursements from HSAs to those who are under age 65 doubles to 20 percent. Employees who have these accounts should be advised to maximize their withdrawals for over-the-counter medications this year and avoid penalties next year.

2. For tax years beginning after 2010, payment processors and third-party settlement organizations, including PayPal, shall be required to report to the IRS all credit card and similar transactions of payments to merchants on the new Form 1099-K, Merchant Card and Third Party Payments. There is an exemption from reporting for merchants who have 200 or fewer transactions, or proceeds of $20,000 or less for the year. You should review your record-keeping practices to ensure your information on income receipts corresponds with the information being reported about your credit card transactions to the IRS. Banks will also likely increase their fees in order to cover these administrative tasks.

3. The government will make tax-free grants to small businesses that set up Comprehensive Workplace Wellness Programs. These programs can focus on certain goals, such as quitting smoking, nutrition, stress management, and general physical fitness. The grants run up to five years beginning in the government’s fiscal year 2011, which starts October 1, 2010. About $200 million has been set aside for this purpose. The grants themselves apply to companies that did not have a wellness program prior to March 23, 2010, and that have fewer than 100 employees who work 25 hours or more per week. No detailed application rules yet exist for these grants, so be sure to keep checking www.healthcare.gov for details.

4. Employers are required to report on employee W-2 forms the value of health insurance, starting in 2011. Reporting is required whether premiums are paid by the employer, employee, or a combination of both. Be certain that you track your health care premiums for the year. Even if you use a payroll service, it is wise to double check.

5. On the benefits side, small businesses (those with fewer than 100 employees) can set up so-called “Simple Cafeteria Plans” beginning in 2011. These plans allow employees to select from a menu of benefits or cash, and such plans are automatically non-discriminatory, meaning that they do not have to undergo the rigorous statutory testing to ensure that they do not improperly favor management or company owners. In order to qualify for the status of a Simple Cafeteria Plan, an employer must either contribute a uniform percentage of compensation (but not less than 2 percent), or the lesser of at least 6 percent of the compensation or twice the contributions that employees make from their wages on a pre-tax basis. Sole proprietors, members of limited liability companies, partners in a partnership, and more-than-2-percent shareholders of S-Corporations are nevertheless barred from participating in a cafeteria plan. The IRS is yet to provide guidance on these plans, so watch for it. Meet with a benefits expert in the meantime to determine whether such a plan makes sense for your company, whether or not as an entirely new plan or as an addition to an existing one. If you do so, don’t forget to factor into your company’s 2011 budget the cost of employer contributions.

1. Starting in 2010, individuals with any amount of modified adjusted gross income can switch a traditional IRA to a Roth IRA. Conversions are fully taxable at your regular tax rate, but for conversions in 2010, taxpayers can spread the tax due over two years. Half of the tax will be due in 2011, and the remaining half will be payable in 2012. Removing the limit on conversions effectively eliminates the income limit on contributions to Roth IRAs. A taxpayer with income too high to use a Roth will be able to contribute to a traditional IRA (which does not have income limits for contributions) and immediately convert to a Roth.

2. The opportunity for itemizers to choose to deduct their state sales tax payments instead of deducting their state and local income taxes ends in 2009, unless Congress specifically extends it.

3. In 2010, the domestic production activities deduction increases to nine percent of qualifying business net income. This deduction applies to businesses engaged in construction, engineering, or architectural services, film production, or the lease, rental or sale of equipment you manufactured.

4. The federal estate tax will be eliminated for estates of individuals who die in 2010.

5. The deduction for up to $4,000 of college tuition and fees expires after 2009, unless Congress specifically extends it.

6. Beginning in 2010, the opportunity for IRA owners age 70½ to directly donate part of their IRA balance to charity will disappear, unless Congress specifically extends it.

7. The maximum foreign earned income exclusion is increased to $91,500. This is a $100 increase from 2009.

8. Starting in 2010, non-itemizers will no longer be allowed to increase their standard deduction by up to $1,000 of property taxes paid, unless Congress extends this break.

9. The tax rate on capital gains from the sale of assets held longer than one year remains at 0% for people in the 10 percent or 15 percent tax brackets. The 15 percent maximum tax rate on long-term capital gains for taxpayers in higher brackets also remains the same. However, these rates are scheduled to increase in 2011.

10. The maximum amount of equipment placed into service that businesses can expense drops by nearly 50%, to $135,000 from $250,000 previously.

11. The special 5 percent maximum rate on dividends of taxpayers in the 10 percent and 15 percent tax brackets remains at zero percent through 2010.

12. For 2010, the alternative minimum tax (AMT) exemption levels drop to $45,000 for married filing jointly, $33,750 for singles and heads of household, and $22,500 for married couples filing separately. Congress, can, however, act in 2010 to extend the relief that was available in 2009.

13. For 2010, the first $2,400 of unemployment benefits you receive is no longer tax-free.

14. The 30 percent tax credit of the cost of energy-saving home improvements reverts to 10 percent after 2010, and is capped at $500.

15. Beginning in 2010, buyers of new vehicles no longer get a tax benefit for sales tax paid on those vehicles, unless they itemize and choose to deduct sales taxes instead of state income taxes.

The tax law is constantly in flux, so be sure you see a qualified financial services professional to take full advantage of the existing economic climate and the opportunities therein.

First, there is now an $8,000 tax credit for first-time home buyers for homes purchased between January 1, 2009, and December 1, 2009. This credit phases out for individuals earning more than $75,000 and couples earning more than $150,000.

There is also a refundable tax credit of $400 per person and $800 for couples in 2009 and 2010. It is calculated at a rate of 6.2 percent of income and again phases out for individuals whose adjusted income is greater than $75,000 and for couples whose adjusted income is greater than $150,000.

A one-time payment of $250 is further provided to Social Security beneficiaries, railroad retirees, and veterans receiving benefits from the Department of Veterans Affairs. State government retirees who are not eligible for Social Security will also receive this payment.

The earned income tax credit for low-income workers who have three or more children, and a greater amount of said workers are eligible for the refundable child tax credit. The income floor is $3,000 for 2009 and 2010, a sharp drop from the previous $8,500 floor.

A $2,500 credit for college education expenses is also in the bill, which is phased out for individuals earning more than $80,000 and couples earning more than $160,000.

As for businesses, there are many new provisions designed to reduce economic and tax pressure, including equipment write-offs, deferral on repurchased debt, and tax breaks on capital gains from stock sales.

The impact of this stimulus package is unique for each individual or business entity, and it is always prudent to seek the advice of qualified financial and tax professionals in order to maximize your benefits.