Mileage and Pension Plan changes for 2001

The Internal Revenue Service announced the
optional standard mileage rates to use for 2001 in computing the deductible costs of operating an automobile for business, charitable, medical or moving expense purposes.

The amounts for the various deductible costs for use of a car will be effective January 1, 2001.  The standard mileage rate for the cost of operating a car is 34.5 cents a mile for all business miles driven. The rate for 2000 was 32.5 cents a mile. The primary reason for the mileage rate increases is due to the jump in gasoline prices.

PENSION PLAN LIMITATIONS FOR TAX YEAR 2001

The Internal Revenue Service announced cost-of-living adjustments applicable to
dollar limitations for pension plans and other items for Tax Year 2001.
However, these limitations may be affected by pending legislation awaiting action by Congress. If this legislation is enacted before the end of the year, some of the cost-of-living adjustments
described below may be modified, and the IRS will announce any modifications as soon as possible.

Section 415 of the Internal Revenue Code provides for dollar limitations on benefits and contributions under qualified retirement plans. It also requires that the Commissioner annually adjust these limits for cost-of-living increases.

Effective January 1, 2001, the limitation on the annual benefit under a defined benefit plan under section 415(b)(1)(A) is increased from $135,000 to
$140,000. For participants who separated from service before January 1, 2001, the limitation for
defined benefit plans under section 415(b)(1)(B) is computed by multiplying the participant's compensation limitation, as adjusted through 2000, by 1.0351.

To see the complete cost-of-living adjustments for pension plans and other items for Tax
Year 2001, please read this news release in its entirety on the IRS Web site at
http://ftp.fedworld.gov/pub/irs-news/ir-00-82.pdf.













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