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2009 Tax Updates
INDIVIDUAL
FILING REQUIREMENTS FOR MOST TAX PAYERS
2009 FILING REQUIREMENTS FOR DEPENDENTS
STANDARD DEDUCTION
EXEMPTION AMOUNTS
PHASE OUT POINTS FOR EXEMPTIONS
2009 STANDARD MILEAGE RATES
TRADITIONAL IRA LIMITS
PHASE OUT FOR IRA DEDUCTIONS
DEPENDENT CARE CREDIT CALCULATION
EDUCATION CREDITS
MEDICAL SAVINGS ACCOUNT (MSA)
HEALTH SAVINGS ACCOUNT (HSA)
ADOPTION CREDIT
STUDENT LOAN INTEREST DEDUCTION
TAX RATE SCHEDULES - SINGLE
TAX RATE SCHEDULES – HEAD OF HOUSEHOLD (HoH)
TAX RATE SCHEDULES – MAIIRED FILING SEPARATE
TAX RATE SCHEDULES – MARRIED FILING JOINTLY OR QUALIFYING WIDOW(ER)
EARNED INCOME CREDIT (EIC)
EARNED INCOME CREDIT (EIC) IN A NUTSHELL
 
BUSINESS
SECTION 179 EXPENSE LIMIT
FICA (SOCIAL SECURITY AND MEDICARE) WAGE BASE
MACRS RECOVERY PERIODS
CORPORATE TAX RATE SCHEDULE
ESTATE AND TRUST TAX RATES
 
1.  FILING REQUIREMENTS FOR MOST TAX PAYERS

If your filing status is

AND at the end of 2009 you were

THEN file a return if your gross
income was at least

Single

Under 65
65 or older

$9,350
$10,750

Married filing jointly

Under 65 (both spouses)
65 or older (one spouse)
65 or older (both spouses)

$18,700
$19,800
$20,000

Married filing separately

Any age

$3,650

Head of household

Under 65
65 or older

$12,000
$13,400

Qualifying widow(er) with dependent child

Under 65
65 or older

$15,050
$16,150

2.  2009 FILING REQUIREMENTS FOR DEPENDENTS

If your parent (or someone else) can claim you as a dependent, use this chart to see if you must file a return.


In this chart, unearned income includes taxable interest, ordinary dividends, and capital gain distributions. Earned income includes wages, tips, and taxable scholarship and fellowship grants. Gross income is the total of your unearned and earned income.

 

SINGLE DEPENDENTS:

Were you either age 65 or older or blind?

No. You must file a return if any of the following apply.

  • Your unearned income was over $950.
  • Your earned income was over $5,700.
  • Your gross income was more than the larger of —
    • $950, or
    • Your earned income (up to $5,400) plus $300.

Yes. You must file a return if any of the following apply.

  • Your unearned income was over $2,350 ($3,750 if 65 or older and blind).
  • Your earned income was over $7,100 ($8,500 if 65 or older and blind).

  • Your gross income was more than the larger of–

    • $ 2,350 ($3,750 if 65 or older and blind), or
    • Your earned income (up to $5,400) plus $1,700 ($3,100 if 65 or older and blind).

 

MARRIED DEPENDENTS:

Were you either age 65 or older or blind?

No. You must file a return if any of the following apply.

  • Your unearned income was over $950.

  • Your earned income was over $5,700.

  • Your gross income was at least $5 and your spouse files a separate return and itemizes deductions.

  • Your gross income was more than the larger of —
    • $950, or
    • Your earned income (up to $5,400) plus $300

Yes. You must file a return if any of the following apply.

  • Your unearned income was over $2,050 ($3,150 if 65 or older and blind).

  • Your earned income was over $6,800 ($7,700 if 65 or older and blind).

  • Your gross income was at least $5 and your spouse files a separate return and itemizes deductions.

  • Your gross income was more than the larger of—
    • $2,050, or ($3,150 if 65 or older and blind) or
    • Your earned income (up to $5,400) plus $1,400 ($2,500 if 65 or older and blind).

     

OTHER SITUATIONS WHEN YOU MUST FILE A 2009 RETURN

You must file a return if any of the four conditions below apply for 2009.

 

1.  You owe any special taxes, including any of the following.

a.  Alternative minimum tax.

b.  Additional tax on a qualified plan, including an individual retirement arrangement (IRA), or other tax-favored account. But if you are filing a return only because you owe this tax, you can file Form 5329 by itself.

c.  Household employment taxes. But if you are filing a return only because you owe this tax, you can file Schedule H by itself.

d. Social security and Medicare tax on tips you did not report to your employer or on wages you received from an employer who did not withhold these taxes.

e.  Write-in taxes, including uncollected social security and Medicare or RRTA tax on tips you reported to your employer or on group-term life insurance and additional tax on health savings account distributions. See the instructions for line 63 on page 42.

f.  Recapture taxes. See the instructions for line 44, that begin on page 33, and line 63, on page 42.

g.  Additional tax on a health savings account from Form 8889, Part III.

 

2. You received any advance earned income credit (EIC) payments from your employer. These payments are shown in Form W-2, box 9.

 

3. You had net earnings from self-employment of at least $400.

 

4. You had wages of $108.28 or more from a church or qualified church-controlled organization that is exempt from employer social security and Medicare taxes.

3  STANDARD DEDUCTION

If your filing status is

Base Amount
(Amount USD)

Additional amount for blindness or age over 65 years (Amount USD)

Single

$5,700

$1,400

Married filing jointly

$11,400

$1,100

Married filing single

$5,700

$1,100

Head of household (HoH)

$8,350

$1,400

Qualifying widow(er) with dependant child

$11,400

$1,100

Dependant of another

$950 or Earned income + $300

$1,100 or $1,1400 if single or HoH

4.  EXEMPTION AMOUNTS

Personal and dependent

$3,650.00

Estate Amount

$600.00

Simple Trust *

$300.00

Complex Trust*

$100.00

* Exemption not allowed in final year

5. PHASE OUT POINTS FOR EXEMPTIONS
Type of Taxpayer Phase out begins Phase out ends

Single

$166,800

$289,300

Married filing jointly

$250,200

$372,700

Married filing separate

$125,100

$186,350

Head of household

$208,500

$331,000

Qualifying widow(er) with dependent child

$250,200

$372,700

6. 2009 STANDARD MILEAGE RATES

Type

Period

Mileage rate per mile

Business Mileage

Beginning January 1, 2009

55 cents per mile

Charitable Mileage

 

14 cents per mile

Medical/Moving Mileage

Beginning January 1, 2009

24 cents per mile

7. TRADITIONAL IRA LIMITS
IRA contribution limits for those who do not participate in employee sponsored plan
Regularn contributions $5,000.00
‘Catch up’ contributions for taxpayers 50 and over $6,000.00
8. PHASE OUT OF IRA DEDUCTIONS

FILING STATUS

AGI begin phase out

AGI fully phased out

Single or Married filing separate and lived apart from spouse for all of 2009

$55,000

$65,000

Married filing jointly (if spouse is covered by a pension plan)

$89,000

$109,000

Married filing jointly (if spouse is not covered by a pension plan)

$166,000

$176,000

Married filing separate

0

$10,000

Head of Household

$55,000

$65,000

Qualifying Widow(er)

$89,000

$109,000

9. DEPENDENT CARE CREDIT CALCULATION

To determine the amount of dependent care credit, multiply the amount of your work related expenses (after applying earned income and dollar limits) by percentage mentioned in column 3. To determine what percentage you need to use, find out your adjusted gross income (AGI) from Form 1040. The following table shows the percentage to be used based on your AGI. The maximum eligible to be multiplied with these percentages is $3,000 per child and $6,000 per return.

 

If your adjusted gross income is

Then the percentage is

Over (USD)

But not over (USD)

 

0

15,000

35

15,000

17,000

34

17,000

19,000

33

19,000

21,000

32

21,000

23,000

31

23,000

25,000

30

25,000

27,000

29

27,000

29,000

28

29,000

31,000

27

31,000

33,000

2

33,000

35,000

25

35,000

37,000

24

37,000

39,000

23

39,000

41,000

22

41,000

43,000

21

43,000

No limit

20

10. EDUCATION CREDITS
HOPE CREDIT
  • Up to $1,800 ($3,600 for disaster area)
  • 100% of first $1,200)$2,400 for disaster area) in qualified expenses and 50% of the next $1,200 ($2,400 for disaster area) in qualified expenses
  • Available only in the first 2 years of post-secondary education are completed
  • Available only for 2 years per eligible student
  • Student must be pursuing an undergraduate degree or other recognized educational credential
  • Student must be enrolled at least half time for at least one academic period beginning during the year
  • No felony or drug conviction on student’s record

 

LIFETIME LEARNING CREDIT

  • Up to $2,000 ($4,000 for disaster area)
  • Maximum lifetime learning rate is 20% (40% for disaster area)
  • Available for all years of post-secondary education and for courses to acquire or improve job skills
  • Available for an unlimited number of years
  • Student does not need to be pursuing a degree or other recognized educational credential
  • Available for one or more courses
  • Felony drug conviction rule does not apply

 

AMERICAN OPPORTUNITY CREDIT

  • Up to $2,500, up to 40% is refundable
  • 100% of first $2,000 and 25$ of next $2,000
  • Available for first-fourth years of college
  • Only available for 2009 and 2010
  • AGI phase out between $80,000-$90,000 ($160,000 - $180,000)

 

HOPE AND LIFETIME LEARNING CREDITS PHASEOUT

Married filing jointly

$100,000 to $120,000

All other filing statuses

$50,000 to $60,000

11. MEDICAL SAVINGS ACCOUNT (MSA)

2009 Premium For High Deductible

Self Coverage

$2,000 - $3,000

Family Coverage

$4,000 - $6,050

Maximum Out Of Pocket

Self Coverage

$4,000

Family Coverage

$7,350

12. HEALTH SAVINGS ACCOUNT (HSA)

2009 Maximum Annual Contributions Limits

Self Coverage

$3,000

Family Coverage

$5,950

2009 Minimum Deductible

Self Coverage

$1,150

Family Coverage

$2,300

2009 Maximum Out of Pocket

 

Self Coverage

$5,800

Family Coverage

$11,600

Additional over age 55

 

2009 and after

$1,000

13. ADOPTION CREDIT
Maximum credit for a child with special needs

$12,150

Other adoptions qualified expenses

Up to $12,150

Phase out range (modified adjusted gross income)

$182,180 - $222,180

14. STUDENT LOAN INTEREST DEDUCTION
Maximum Interest deduction

$2,500

Modified Adjusted Gross Income phase out

 

Married filing jointly

$120,000 - $150,000

Single / Head of Household $60,000 - $75,000
15. TAX RATE SCHEDULES - SINGLE
Taxable Income (USD) Tax (USD)

Over (USD)

But not over (USD)

Tax (USD)

+ %

On amount over (USD)

0

8,350

0

10

0

8,025

33,950

835,00

15

8,350

33,950

82,250

4,675.00

25

33,950

82,250

171,550

16,750.00

28

82,250

171,550

372,950

41,754.00

33

171,550

372,950

----------

108,216.00

35

372,950

16. TAX RATE SCHEDULES – HEAD OF HOUSEHOLD (HoH)

Taxable Income (USD)

Tax (USD)

Over

But not over

Tax (USD)

+ %

On amount over

0

11,950

0

10

0

11,950

45,500

1,195.00

15

11,950

45,500

117,450

6,227.50

25

45,500

117,450

190,200

24,215.00

28

117,450

190,200

372,900

44,585.00

33

190,200

372,900

----------

104,892.50

35

372,950

17. TAX RATE SCHEDULES – MAIIRED FILING SEPARATE

Taxable Income (USD)

Tax (USD)

Over

But not over

Tax (USD)

+ %

On amount over

0

8,350

0

10

0

8,350

33,950

835.00

15

8,350

33,950

68,525

4,675.00

25

33,950

68,525

104,425

13,318.75

28

68,525

104,425

186,475

23,370.75

33

104,425

186,475

----------

50,447.25

35

186,475

18. TAX RATE SCHEDULES – MARRIED FILING JOINTLY OR QUALIFYING WIDOW(ER)

Taxable Income (USD)

Tax (USD)

Over

But not over

Tax (USD)

+ %

On amount over

0

16,700

0

10

0

16,700

67,900

1,670.00

15

16,700

67,900

137,050

9,350.00

25

67,900

137,050

208,850

26,637.50

28

137,050

208,850

372,950

46,741.50

33

208,850

372,950

----------

100,894.50

35

372,950

19. EARNED INCOME CREDIT (EIC)

Single, Head of Household, and Qualifying Widow(er)

Earned income range to receive the maximum EIC (USD)

Maximum EIC amount (USD)

Maximum earnings before EIC eliminated (USD)

 

From

To

 

 

With no children

5,970

7,500

457

13,440

With one child

8,950

16,450

3,043

35,463

With two children

12,570

16,450

5,028

40,295

With three children 12,570 16,450 5,657 43,279

 

 

 

 

 

Married filing jointly

Earned income range to receive the maximum EIC (USD)

Maximum EIC amount (USD)

Maximum earnings before EIC eliminated (USD)

With no children

5,950

12,500

457

18,440

With one child

8,950

21,450

3,043

40,463

With two children

12,550

21,450

5,028

45,295

With three children 12,550 21,450 5,657 48,279
20. EARNED INCOME CREDIT (EIC) IN A NUTSHELL

First, you must meet all the rules in this column

Second, you must meet all the rules in one of these columns, whichever applies

Third, you must meet the rule in this column

Part A
Rules for everyone

Part B

Rules if you have a qualifying child

 

Part C
Rules if you do not have a qualifying child

Part D
Figuring and claiming the EIC

1. Your adjusted gross income (AGI) must be less than

-- $43,279 ($48,279 for mar­ried filing joint) if you have three qualifying children.

-- $40,295 ($45,295 for married filing joint) if you have two qualifying children.

 

-- $35,463 ($40,463 for married filing joint) if you have one qualifying child.

 

-- $13,440 ($18,440 for married filing jointly) if you do not have a qualifying child

2.
 You must have a valid social security number.

3.
 Your filing status cannot be “married filing separate.”

4. 
You must be a U.S. citizen or resident alien all year.

5. 
You cannot file Form 2555 or Form 2555-EZ (relating to foreign earned income).

6. Your investment income must be $3,100 or less.

7. You must have earned income.

8. Your child must meet the relationship, age, and residency tests.

9. Your qualifying
child cannot be used
by more than one
person to claim the
EIC.

10. You cannot be a qualifying child of another person

11. You must be at least 25 but under age 65.

12.
You cannot be the dependent of another person.

13.
You cannot be a qualifying child of another person.

14.
You must have lived in the United States more than half of the year.

15. Your earned income must be less than $43,279 ($48,279 for married filing joint) if you have three qualifying children. 


-- $40,295 ($45,295 for married filing joint) if you have two qualifying children.


-- $35,463 ($40,463 if married filing joint) if you have one qualifying child.

 

-- $13,440 ($18,440 for married filing joint) if you do not have a qualifying child.

1. SECTION 179 EXPENSE LIMIT

Expense limit

$250,000

Phase out Threshold

$800,000

2. FICA (SOCIAL SECURITY AND MEDICARE) WAGE BASE

FICA tax rate

7.65% - (Social Security 6.2% + Medicare 1.45%)

Social Security Wage Base

$106,800

Maximum Social Security Amount

$6,621.60

Medicare Wage Base

No ceiling

Maximum Medicare wage tax No ceiling
3.  MACRS RECOVERY PERIODS

Type of property

MACRS recovery period

 

General Depreciation System

Alternative Depreciation System

Computers and their peripheral equipment

5 years

5 years

Office machinery such as :
-- Typewriters
-- Calculators
-- Copiers

5 years

6 years

Automobiles

5 years

5 years

Light Trucks

5 years

5 years

Appliances such as:
-- Stoves
-- Refrigerators

5 years

9 years

Carpets

5 years

9 years

Furniture used in rental property

5 years

9 years

Office furniture and equipment such as:
-- Desks
-- Files

7 years

10 years

Any property that does not have a class life  and that has not been designated by law as being in any other class

7 years

12 years

Roads

15 years

20 years

Shrubbery

15 years

20 years

Fences

15 years

20 years

Residential rental property
Buildings and structures and structural components such as furnaces, water pipes, venting etc.

27.5 years

40 years

Additions and improvements such as new roof

The same recovery period as that of the property to which the addition or improvement is made, determined as if the property were placed in service at the same time as the addition or improvement.

4. CORPORATE TAX RATE SCHEDULE

Taxable Income (USD)

Tax (USD)

Over

But not over

Tax (USD)

+ %

On amount over

0

50,000

0

15

0

50,000

75,000

7500

25

50,000

75,000

100,000

13750

34

75,000

100,000

335,000

22250

39

100,000

335,000

10,000,000

113900

34

335,000

10,000,000

15,000,000

3400000

35

10,000,000

15,000,000

18,000,000

5150000

38

15,000,000

18,000,000

NO LIMIT

----------

35

0

5. ESTATE AND TRUST TAX RATES

Taxable Income (USD)

Tax (USD)

Over

But not over

Tax (USD)

+ %

On amount over

0

2,300

0

15

0

2,300

5,350

345.00

25

2,300

5,350

8,200

1,107.50

28

5,350

8,200

11,150

1,905.50

22

8,200

11,150

----------

2,879.00

35

11,150

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