by Richard Schneider
Emeritus Professor of Accounting
Winona State University
The first half of 2009 has again seen a number of tax law changes. Below are a few of the changes that affect 2009, more changes should be coming in the last half of 2009. IRS publication 553 highlights all of these changes and more. Some of the items listed below have specific publication or numbers listed. IRS publications and forms can be read and printed from their web site: WWW.IRS.GOV” WWW.IRS.GOV
The standard deduction is increased by $250 per taxpayer, to $5,700 for singles, and $11,400 for married filing jointly. (PUB 505)
The personal and dependent exemption is increased by $150 to $3,650. (PUB 505)
First time home buyers get a credit of $8,000, not like the $7,500 credit/loan for 2008 which had to be repaid.
Expanding the Hope education credit to $2,500, and liberalizing the expenses that qualify to compute the credit. The change is for four years and the credit is partly refundable. (PUB 970)
Unemployment Compensation – the first $2,400 received is not taxable. Before 2009 all unemployment comp. payments were fully taxable.
A new tax free employee benefit – up to $20 per month for using a bike to commute to work.
Sales and excise taxes on the purchase of qualified motor vehicles, as increase in the standard deduction, or part of itemized deductions.
Limitations on the exclusion of the gain on sale of primary residence because of nonqualified use.
Reinstatement of the energy saving credit related to installation of new doors, windows, furnace, etc.
Credit for the installation of alternative energy source equipment for the home, such as solar.
For children of divorced or separated parents – the custodial parent may now revoke, within limits, the assignment of the dependency exemption to the non-custodial parent. (FORM 8332)
Waiver of the required minimum distribution (RMD) for taxpayers who are 70 ˝ or older, for 2009. The RMD for 2009 is delayed until April 1, 2010.
I will detail some these in future articles. If you have a special interest please email me at “mailto:email@example.com” firstname.lastname@example.org .