Highlights of 2009 Tax
| Unemployment Compensation — For 2009 only, there is no federal income tax on the first $2,400 of unemployment benefits. However, the balance is taxable. The benefit of this provision depends upon your tax bracket.
American Opportunity Credit — For 2009 and 2010, Hope Education Credit is renamed and enhanced. For four years of college, and the maximum credit per student increases to $2,500. 40% of the credit is refundable, provided the taxpayer is not a child under the age of 18 or under the age of 24, a full-time student and is not self-supporting.
Sales Tax Deduction for New Car Purchases — Only to 2009, taxpayers will be allowed to deduct the sales tax paid on the purchase cost of a new motor vehicle, up to a cost of $49,500 ($24,750 if filing married separate), even if they don’t itemize deductions.
Making Work Pay Credit — A refundable credit of your earned income up to $400 for individuals and $800 for married filing jointly couples.
One-Time Payment to Retirees — Recipients of Social Security, railroad retirement, and veterans benefits are each eligible for a one-time payment of $250.
First-time Homebuyers Credit — $8,000 ($4,000 married separate) and no repayment requirement, except in cases that the home is sold or ceases to be the taxpayer’s principal residence within 36 months of its purchase. The deadline for qualifying home purchases is extended from Nov. 30, 2009, to Apr. 30, 2010. Also the new provision provides a "long-time resident" credit up to $6,500 to others who do not qualify as "first-time homebuyers."
Qualified Higher Education Expense — The definition of qualified higher education expenses is expanded to include the purchase of any computer technology or equipment and Internet access and related services for use by the designated beneficiary and the beneficiary’s family.
No Minimum Distributions Required — Minimum distributions from qualified retirement plans are not required for 2009.
|Personal Energy Property Credit — A nonrefundable credit equal to 30% of the cost of personal energy property (certain energy saving improvements such as insulation, doors, windows, electric heat pumps, etc. to a principal residence) is available. The credit is limited to a total of $1,500 for 2009 and 2010.
Residential Energy Efficient Property Credit — A nonrefundable credit equal to 30% of the cost of residential energy efficient property (qualified solar water heating, geothermal heat pump, fuel cell, small wind energy, and solar electric property). For qualified fuel cell property, the credit is limited to $500 for each 0.5 kilowatt of capacity.
Plug-In Electric Vehicle Credit — The credit equals $2,500 plus, for vehicles that draw propulsion energy from a battery with at least 5 kilowatt hours of capacity, $417 for each kilowatt hour of capacity in excess of 5 kilowatt hours up to a total of $5,000.
Several Popular Tax Breaks Extended — The deduction for state and local sales taxes, the educator expense deduction, and the tuition and fees deductions are extended to 2009.
Federal Estimated Tax Requirement — For 2009, eligible individuals can make quarterly estimated tax payments equal to 90 percent of their 2009 tax or 90 percent of their 2008 tax, whichever is less. Individuals qualify if they received more than half of their gross income from their small businesses in 2008 and meet other requirements.
Additional Standard Deduction — An additional standard deduction for those who don’t qualify to itemize their tax deductions, but who do pay state or local real estate taxes. This deduction is still available for 2009.
California Income Tax Rate — For at least the 2009 and 2010 taxable years, the personal income tax rates will increase by 0.25%.
Standard Mileage Rates
55 cents per mile for business
24 cents per mile for medical reasons
24 cents per mile for moving expenses
14 cents per mile for charitable service