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2009 Tax Deductions: What's New

2009 Tax Deductions: So what has change from 2008 that parents, homeowners, students, and others are looking to save money when filing there return this year in the US. I have the new highlighted key federal income tax deductions for individuals and families.

Standard Deduction Increased For Most Taxpayers

The basic standard deduction for those that can't deduct mortgage interest etc. is

1$10,900 for married couples filing a joint return and qualifying widows and widower(up $200)

$5,400 for singles and married individuals filing separate returns (up $100)

$8,000 for heads of households (up$150)

Higher amounts apply to blind people and senior citizens

New for 2009 tax deductions is taxpayers can claim an additional standard deduction, based on state or local real-estate taxes paid in 2008. The maximum deduction is $500 or $1000 for joint filers.

Exemptions Rise

The value of each personal and dependency exemption has risen $100 since 2007 to $3,500. This one of many provisions the are adjusted to keep up with inflation.

First Time Homebuyer Credit

If you did not own a home in the previous three years and purchased one this year, You may qualify for this credit.

This credit of up to $7,500 works like a 15 year interest free loan for homes purchased from April 9,2008 to November 2009.

Contribution Limits Rise for IRAs

More people will be able to make a tax deductible contribution to a traditional IRA. This deduction is phased out for singles and head of households who are covered by a workplace retirement plan and have modified adjusted gross incomes between $53,000 and 63,000 compared to $52,000 and $62,000 last year.

Married couples filing jointly that are covered by a work place retirement plan income phase out range is $85,000 to $105,000 which is up from $52,000 and $103,000 last year.

If you are married to someone who is not covered by a work place retirement plan the IRA contributor deduction phase out is between $159,000 and $169,000, up from $156,000 and 166,000 in 2007.

For married individuals filing separate returns the phase out remains the same at $0 to $10,000.

Earned Income Tax Credits Rises

The maximum earned income tax credit(EITC)is:

$4,824 for people with two or more qualifying children, up from $4,716 in 2007

$2,917 for those with one child, up from $2,853 last year

$438 for people with no children, up from $428 in 2007

Another 2009 tax deduction change is for low to moderate income working families, the EITC helps taxpayers whose incomes are below certain income thresholds which has risen since 2008.

$41,646 for those with two or more children

$36,995 for people with one child and

$15,880 for those with no children

Taxes Lowered for Many Investors

Also new for 2009 tax deductions is the five percent tax rate on qualified dividends and net capital gains is reduced to zero. This reduction applies to investors whose taxable income is below:

$65,100, if married filing jointly or qualiiifying widow or widower

$32,550, If single or married filing separately or

$43,650, if head of household

For more information click onto the IRS link.

2009 Tax Deductions: Back to Tax Deductions

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