The federal tax landscape has undergone a series of changes in the past years. Prior legislation has left a complicated array of changing tax rates and benefit phase-out levels – to expire in 2010. The new administration and Congress are quite likely to change all of this. That leaves taxpayers with considerable uncertainty even before 2010, which makes planning difficult.
Here are some tax tips for 2009:
1. Retirement Accounts – the maximum annual contribution limit:
• Individual Retirement Accounts (IRA) – remains at $5,000 ($6,000 if you are age
50 or older).
• 401(k) Plans – increased to $16,500, ($22,000 if you are age 50 or over).
• Qualified Plan Contributions – including SEP and Keogh Plans, increased to
$49,000.
2. The Standard Mileage Rates – Business miles: 55 cents a mile. Charitable purposes: 14 cents per mile. Moving and Medical reasons: 24 cents a mile.
3. Alternative Minimum Tax (AMT) – For 2009 the exemption reverts back to $45,000 if you’re filing as married filing jointly and $33,750 for single taxpayers; so all eyes are on the new administration to propose a “fix” once and for all.
4. The annual gift tax exclusion increased to $13,000 per person and the estate tax exemption to $3.5 million.
5. Mortgage Debt Relief – This provision excludes from taxation discharges up to $2 million of indebtedness that is secured by a principal residence and is incurred in the acquisition, construction or improvement of the residence.
6. A first-time homebuyer could receive a credit up to $7,500 when purchasing a home after April 9, 2008 and before July 1, 2009. The credit is then repaid over a period of 15 years.
7. Converted Principal Residence – Starting January 2009, sellers of a qualifying principal residence with non-qualifying use (rental or vacation usage) will have to pro-rate the gain for purposes of the exclusion.
Securities offered through Associated Securities Corp. (ASC), member FINRA/SIPC. Advisory services offered through Associated Planners Investment Advisory, Inc (APIA), ASC, David S. Reinders, CFP®, Inc., Registered Investment Advisors. David S. Reinders, CFP®, Inc. is not affiliated with ASC or APIA.
For more information, contact Rebecca Robins, CPA/PFS, CFP®, CA Insurance Lic#0D75745 at 661-222-2331. The office is located at 25129 The Old Road, Suite 105 in Stevenson Ranch.
*For specific tax advice, we will work with you and your tax advisor. Information and amounts obtained from publications available at www.irs.gov .