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Changes for 2009 AND 2010
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IRS Tax Law Changes for 2009
Highlights:
Buying a home:IRS News Release
First-time Homebuyers ($8,000) and Long-term Homeowners ($6,500) both get tax breaks for purchasing a new home. This home MUST be your principle residence for at least 3 years following the purchase. If you must move before the 3 year period is up, there are limited exceptions under which you might not have to repay the $8,000 or the $6,500.
IRAs -
NO Required Minimum Distribution - Taxpayers who are over 70 1/2 years of age - NO required minimum distribution(RMD)is required for 2009.
Income Limitation for Full Deduction Increased, see Individual Retirement Accounts (IRAs)
Hope and Lifetime Learning Credits - The new American Opportunity Credit (formerly Hope) has expanded the number of years to claim the basic credit from 2 to 4 post-secondary years of college and now includes "required course materials" to the list of qualifying expenses. Income levels have also been increased so that more families will be able to claim the credit.
For 2009, the amount of your Hope or lifetime learning credit is phased out (gradually reduced) if your MAGI is $80,000 or more for a single person or $160,000 or more if you file a joint return.
For more information, see chapters 2 and 3 in Publication 970, Tax Benefits for Education.
Charitable Contributions
Recordkeeping requirements for cash contributions state that you cannot deduct a cash contribution, regardless of the amount, unless you keep a bank record of the contribution; i.e., a canceled check, a bank copy of a canceled check, or a bank statement containing the name of the charity, the date, and the amount or a written communication from the charity. The written communication must include the name of the charity, date of the contribution, and amount of the contribution.
For more information, see Publication 526, Charitable Contributions.
For rules about donating vehicles and other property, see Publication 561, Determining the Value of Donated Property
Standard Mileage for Auto use
Businesses which use no more than four vehicles at the same time for business purposes may use the standard mileage rate. Read about other rules and rates for 2009 at:
IRS Standard Mileage Rates/Rules
For miles driven for Business: or Charitable: or Medical:
2009 = 55 cents / 14 cents / 24 cents
2010 = 50 cents / 14 cents / 16.5 cents
SALES TAX DEDUCTION for itemizers
This has been extended for 2009. Itemizers are able to choose to deduct state income taxes OR sales taxes paid(using actual receipts OR a standard table PLUS large major purchases.) You may NOT deduct BOTH.
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