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Tax Memo - 1% Taxable Benefit Rate: Action Required Before January 1, 2010
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The federal prescribed interest rate for taxable benefits is 1% until December 31, 2009, the lowest in at least two decades.
A low rate can provide tax saving opportunities for you or your family, if you will:
- Participate in or refinance a family income-splitting loan arrangement; or
- Take out or replace an employee home purchase loan.
To lock in the 1% rate, you must act before January 1, 2010. The rate is subject to change every quarter, so after December 31, 2009, it could be higher or the same. Read the Tax Memo below to learn different strategies.
