Tax-Law For Individuals
Thursday, May 6, 2010 // 4 Comments // News
Alternative Minimum Tax (AMT)
There are several changes affecting Alternative Minimum Tax for 2009.
Information on adoption benefits, child’s investment income, the definition of a qualifying child, and additional child tax credit.
P.L. 111-118 made changes to the COBRA premium assistance provisions.
Decreased Estimated Tax Payments for Qualified Individuals With Small Businesses
For 2009, qualified individuals with small businesses may be eligible to make smaller estimated tax payments.
Deduction for Credit or Debit Card Convenience Fees
If you pay your income tax (including estimated tax payments) by credit or debit card, you may be able to deduct convenience fees.
Deduction for Sales and Excise Taxes Imposed on Purchase of New Motor Vehicles
In 2009, you can deduct the state or local sales and excise taxes imposed on the purchase of a qualified motor vehicle after February 16, 2009, and before January 1, 2010.
The earned income credit amounts have increased for 2009 and 2010.
Information on new economic recovery payments and credits.
Information on education savings bond exclusion, hope and lifetime learning credits, tuition and fees deduction, and student loan interest deduction.
Health/Medical-Related Tax Changes
Information on Archer Medical Savings Accounts (MSAs), Health Savings Accounts(HSAs), and long-term care premiums.
Home/Residence-Related Tax Changes
Information on mortgage insurance premiums, residential energy credits, and sale of main home by employees of intelligence communities.
Income Averaging for Farmers and Fisherman
New rules apply for averaging farming and fishing income. Information on settlements from Exxon Valdez litigation.
Increase in Limit on Long-Term Care and Accelerated Death Benefits Exclusion
New limits on exclusion payments made under a long-term care insurance contract.
Increase in Personal Casualty and Theft Loss Limit
General rule for personal casualty or theft loss for 2009.
The itemized deduction phaseout income limits have increased for 2009.
New Rules for Children of Divorced or Separated Parents
For tax years beginning after July 2, 2008 (the 2009 calendar year for most taxpayers), new rules apply to allow the custodial parent to revoke a release of claim to exemption that was previously released to the noncustodial parent on Form 8332 or similar form.
Penalty for Failure to File Income Tax Return Increased
The failure to file penalty has increased.
Personal Exemption Amount Increased
In 2009, you can deduct the state or local sales and excise taxes imposed on the purchase of a qualified motor vehicle after February 16, 2009, and before January 1, 2010.
Qualified Transportation Fringe Benefits
Changes to the monthly exclusion for commuter highway vehicle transportation and transit passes and reimbursement for reasonable expenses of qualified bicycle commuting.
Information on residential energy credits.
Small Business Health Care Tax Credit
Health coverage legislation enacted this year includes a Small Business Health Care Tax Credit to help them and small tax-exempt organizations afford the cost of covering their workers.
Social Security and Medicare Taxes
The maximum amount of wages subject to the social security tax and Medicare tax remains unchanged from 2009.
Special Limitation Period for Retroactively Excluding Military Retirement Pay
If you retire from the armed services based on years of service and are later given a retroactive service-connected disability rating by the VA, your retirement pay for the retroactive period is excluded from income up to the amount of VA disability benefits you would have been entitled to receive.
The standard deduction increased.
The standard mileage rate for business use of your vehicle, medical and move- related use and charitable use have decreased for 2009.
A portion of unemployment compensation received is excludable.
Wage Threshold for Household Employees
The social security and Medicare wage threshold for household employees is…
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