As tax season is underway and people are planning to prepare and file their tax returns, they should be aware of the many changes for the 2009 tax return. From the increase in common tax deductions to numerous new deductions offered in the stimulus program, you won’t want to miss out on money you are entitled to. If you are hiring an accountant then these might not be relevant – but make sure you understand the ramifications of completing your own tax return vs hiring an accountant.
Here are some income tax changes for 2009 tax year.
If you thinking about buying tax preparation software then consider software programs such as TurboTax
Increases from last year deductions include the following:
Standard deductions have increased for 2009. If you are single, your standard deduction will be $5,700.00. If you are married and filing separately from your spouse, your deduction will also be $5,700. If you are the head of the household your standard deduction will be $8,350.00. If you are married and filing jointly with your spouse your deduction will be $11,400.
Mileage deductions are also up for 2009. Business miles deduction can be claimed at 55 cents per mile, charitable service miles at 14 cents per mile and medical travel at 24 cents per mile.
Earned income tax for low and middle income working families who have at least two children was also increased for 2009 returns. Families will now qualify for a $5,028.00 deduction if their qualifying limit income is $43,415 or less.
New tax credits you should be aware of:
One time $250.00 payment credit for retirees, those that are disabled, disabled Veterans, and government retirees who are do not receive social security benefits. Many individuals already received this payment. Those who did not and qualify can claim this deduction on their 2009 federal income tax return.
Sales tax deductions for new vehicle purchases. If you purchased a new vehicle after February 16, 2009 you could qualify for a tax deduction. The deduction is available only for new vehicles and is limited to the tax paid on the first $49,000 of the purchase price. You must also meet income requirements to claim this deduction.
First Time Home buyer credit for 2009. If you became a first time home buyer, meaning you or you and your spouse had not owned a home in the three years prior, and purchased a home in 2009, you are entitled to a refundable tax credit. Depending on your purchase date and your income the amount and terms can vary. Be sure to check details for your situation before filing.
If you were unemployed during 2009 and collected unemployment you will receive an additional tax break. The first $2,400 you earned on unemployment wages will be tax free.
If you attended and paid for college during 2009 and were in the first four years of your first post secondary education program, you could be eligible for a tax credit. On the first $2,000.00 you paid on your education including tuition, books and related expenses you will receive a 100% deduction. On the second $2,000.00 spent you will receive a 25% deduction. Some people will not qualify for this deduction based on household income.
Tax credits are also available for qualifying energy efficient purchases during the 2009 tax year. Windows, insulation, solar energy are some of the items that qualify.
Hire an accountant or complete tax return myself?