News

Haiti Relief Charitable Donations - Taxpayers who make donations in early 2010 to help Haiti after the January 12 earthquake can take a deduction on their 2009 tax returns. Haiti disaster relief contributions made after January 11 and before March 1, 2010 qualify for this special treatment. The Senate approved this measure on January 21 and President Obama signed it into law on January 22.

Other Tax News for 2009

Making Work Pay Credit - Individuals with earned income in 2009 may be able to claim a tax credit of $400 ($800 if filing jointly). The credit is phased out if modified adjusted gross income exceeds $75,000 (or $150,000 on a joint return).

First-Time Homebuyer Credit - For a qualifying home purchase in 2009 before December 1, 2009, eligible homebuyers may qualify for a tax credit of $8,000 ($4,000 if married filing separately) or, if less, 10% of the purchase price of the home. The credit begins to phase out if modified adjusted gross income exceeds $75,000 ($150,000 on a joint return). Proposals have been made to extend this credit for home purchase after November 30, 2009.

Required Minimum Distributions Waived - Individuals age 70 1/2 and older did not have to receive a required minimum distribution for 2009 from their traditional IRA or employer sponsored retirement plan. Distributions will have to be taken in 2010 unless this provision is extended.

Unemployment Compensation Partially Tax Exempt - Taxpayers who received unemployment compensation during 2009 may exclude the first $2,400 in benefits from their taxable income. Proposals have been made to extend this exclusion to 2010.

Residential Energy Credits - The credit for home energy improvements (such as insulation, storm windows and heaters), which expired after 2007, has been reinstated and increased. A 30% credit is allowed, with a two-year overall credit of $1,500 for 2009 and 2010.

IRS Mileage Rates - For 2009, the IRS standard business mileage rate is 55 cents per mile. For medical and moving expenses, the rate is 24 cents per mile. The rate for charitable volunteers is 14 cents per mile.

KEY FIGURES FOR THE 2009 TAX YEAR

Standard Deductions
Married Filing Joint Return	$11,400
Surviving Spouse	$11,400
Head of Household	$8,350
Unmarried	$5,700
Married Filing Separate Return	$5,700

Itemized Deductions
Married Filing Separate Return (Phaseout Starts)	$83,400
Others (Phaseout Starts)	$166,800
Casualty Loss (AGI Threshold)	10%
Medical Deduction (AGI Threshold)	7.50%
Miscellaneous (AGI Threshold)	2%

Retirement Plans
SEP Nondiscrimination Compensation Amount	$245,000
401(k) Maximum Compensation Amount	$245,000
401(k) Maximum Exclusion (generally)	$16,500
IRA Deduction Limit (generally)	$5,000
SIMPLE Contribution Limit	$11,500
*Catch-Up Contributions (age 50 and over):*
Traditional and ROTH IRAs	$1,000
SIMPLE IRAs	$2,500
401(k), 403(b), and 457 Plans	$5,500

Adjusted Net Capital Gains
General Rate	15%
Low Rate(Taxpayers in 10% or 15% bracket)	0%
High Rate (Collectibles)	28%
Recaptured Gain on Real Estate	25%