IRS Issues Procedure Adjusting Tax Credits, Amount Limits for Inflation

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IRS issues Revenue Procedure 2010-40, which provides inflation-adjusted amounts for various tax credits, limits, and fringe benefits. Every year IRS issues a procedure identifying changes in amounts for a multitude of tax credits, fringe benefit limits, tax exclusions, and income limits for the coming calendar year. The cost-of-living adjustments that will affect limits on contributions to tax-deferred retirement plans and deferred compensation for the 2011 tax year will generally be the same as those established for the 2010 tax year, and any inflation adjustments for the 2011 tax year will be small ones, IRS says.