TAX TIPS 

Standard Deduction:

• Married Couples Filing Joint Returns      $11,400 up from $10,900 in 2008
• Single/Married Filing seperate                  $5,700 up from $5,450 in 2008
• Head of Household                                     $8,350 up from $8,000 in 2008

  Personal & Dependency Exemptions:

•  $3,650 up from $3,500 in 2008

 Earned Income Credit for 2009:

• Credit has increased from 2 to 3 children for tax year 2009
• Credit ranges from $457 maximum credit with no children to $5,657with three or more childre
• Income limits for this credit range from $13,440 to a maximum of $48,281  

Gift Exclusion:

• Annual exclusion rises to $13,000 up from $12,000 in 2008

Unemployment:

• New law exempts part of unemployment benefits you may have received.  The new law temporarily allows you to exclude from income up to $2,400, ($4,800 if MFJ and both received benefits of at least $2,400 each) of benefit for 2009.  Any amount exceeding this is still fully taxable by the federal government.

Standard Mileage rates for 2009:

• Business mileage rate = 55 cents per mile
• Medical/Moving rate       = 24 cents per mile
• Charitable rate                = 14 cents per mile
• All mileage claimed by a taxpayer on their tax return must be supported by documentation. The IRS has been requesting this documentation during audits of taxpayers. Taxpayers are required to keep written documentation forll miles claimed which must include dates, beginning mileage, ending mileage, and pupose of the trip

American Opportunity Credit/Educational Credit:

• For tax years 2009 and 2010 the credit provides undergraduates a dollar for dollar reduction of taxes, up to $2,500 of the first $4,000 of qualifying education expenses.  In addition to tuition, expenses include required materials such as books, supplies, and equipment needed for a course.
• Unlike the Hope credit, this credit can be used for all four college years and is refundable up to $1,000.  You can receive a refund of up to forty percent of the credit, even if you owe no tax.  Income limits and phaseouts apply to this credit.

First Time Homebuyer Credit:

• February 2009, Uncle Sam extended the maximum tax credit to $8000 and by eliminating the requirement to pay back the credit makes this a must have for first time home buyers.
• Homes acquired after November 6, 2009 are no longer limited to first time purchases, as long-time residents who have lived in their old residence for five consecutive years are now able to take advantage of the new rules and be eligible for a reduced credit.