What's New - 2009 Form 1040

The major source of changes affecting your 2009 returns comes from newly enacted legislation including the following:

New List of Tax Law Changes as compiled by Internal Revenue Service;

Overview of the Fifth Protocol to the Canada U.S. Treaty

See how the Fifth Protocol changes cross border business

You should carefully review your situation to determine whether any of these new provisions will apply to you in 2009. 

Summary of 2009 Changes for Individuals

• Income levels at which individuals must file income tax returns have increased for 2009
• Basic standard deduction amounts have increased for 2009
• The deduction for each personal exemption is $3,650 for 2009
• Inflation-adjusted income amounts that trigger the reduction of allowable itemized deductions and personal exemptions for high-income taxpayers have increased for 2009
• "Kiddie" tax amount is $1,900 for 2009
• The standard mileage rate for all business use of a car is 55 cents per mile for 2009
• Per diem rates under the high-low method of substantiating travel expenses are at $258 for high-cost localities and $163 for low-cost localities for travel on or after 10/01/09
• Student loan interest, up to $2,500 in 2009, may be deducted "above-the-line" by qualifying taxpayers
• The transportation fringe benefit exclusion amount for employer-provided transit passes or vehicles is $120 per month in January and February 2009 and $230 per month in March through December 2009. The exclusion amount for employer-provided parking is $230 per month for all of 2009

Depreciation, Amortization and Depletion

• The maximum Code Sec. 179 deduction for 2009 is $250,000

Tax Credits

• For 2009, the maximum earned income credit for eligible taxpayers with no qualifying children is $457, with one qualifying child is $3,043, and with two or more qualifying children is $5,028
• The child tax credit is $1,000 for 2009
• The education tax credits (Hope and Lifetime Learning) are $2,500 and $2,000, respectively, for 2009

Withholding

• The 2009 OASDI wage base for FICA and self-employment tax purposes is $106,800
• The 2009 wage threshold for "Nanny Tax" reporting is $1,700

Mark T. Serbinski Certified Public Accountants and Serbinski Partners PC, Chartered Accountants specialize in situations involving the taxation of U.S. citizens living abroad and Canadians living or working in the United States.  Please contact us for a complimentary initial review of your particular situation on a confidential basis. 

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Last Update: Jul 13, 2010    Copyright ©2010 by Serbinski & Associates, Inc., - ALL RIGHTS RESERVED Unauthorized reproduction prohibited. Although we strive to provide accurate and timely information on this site, the information contained herein deals with complex issues in a concise manner, which may cause unintended results if taken out of context, and is therefore intended for general information purposes only. No action should be taken without obtaining prior legal, accounting or other appropriate professional consultation. To ensure compliance with requirements imposed by the Internal Revenue Service, we inform you that any tax advice contained on this web site was not intended or written to be used, and cannot be used, by the recipient (a) for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code or applicable state or local tax law provisions and (b) for the purpose of promoting, marketing, or recommending any tax-related matters addressed within to another party.