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Thursday, December 10, 2009

What’s New for the 2009 Tax Season

The start of the 2009 tax season is fast approaching. Here are some highlights of changes introduced for the 2009 tax year.

Income for tax brackets has increased approximately 5 percent.
Personal exemptions are $3,650 each as compared to $3,500 in 2008.
Standard deductions have been raised. $11,400 for married filing jointly, $5,700 for single filers, and $8,350 for head of household.
Those filers taking the standard deduction may also deduct property tax. Joint filers can deduct up to $1,000 and single filers up to $500.
The first $2,400 in unemployment benefits is tax free.
First-time homebuyers may qualify for a tax credit of up to $8,000.
Sales tax for the purchase of a new vehicle may be deducted even if the taxpayer does not itemize.
The Hope credit for college tuition has been replaced with a new credit of up to $2,500 per student. It now also covers books.
Funds from a 529 College plan may now be used for a computer and internet access.
The tax credit for the cost of energy saving home improvements is 30 percent in 2009 and 2010, up to a maximum of $1,500 over the two years. Improvements include windows, doors, high-efficiency furnaces, water heaters and central air conditioners.
Required Minimum Distributions from tax-deferred retirement accounts are suspended for 2009. However, if the distribution is actually a 2008 distribution (the first upon reaching 70 ½ in 2008 that was deferred to April 2009) it must still be taken.

IRS Circular 230 Disclosure

Pursuant to U.S. Treasury Department Regulations, we are now required to advise you that any federal tax advice contained in this communication, including attachments and enclosures, is not intended by the Sender or Sandra G Johnson, CPA, P.C. to constitute a covered opinion pursuant to regulation section 10.35 or to be used for the purpose of (i) avoiding tax-related penalties under Internal Revenue Code or (ii) promoting, marketing, or recommending to another party any tax-related matters addressed herein.


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