Please keep in mind that preliminary information often changes due to political pressures in Washington and locally.
Zero Long-term capital gains tax rate:
Taxpayers in the 10% or 15% tax brackets will NOT be taxed on any capital gains. Therefore, the capital gains rate for these taxpayers is 0%. However, the long-term capital gains rate remains at 15% for taxpayers in all other tax brackets. Note that special rules may apply to some situations such as depreciation recapture, collectibles, etc.
2009 Standard Mileage Rates:
Business $0.55 per mile
Charitable $0.14 per mile
Medical $0.24 per mile
The personal exemption:
Which you claim for yourself and each dependent, will rise to $3,650 for 2009, up $150 from the 2008 level. For folks in the 25% bracket, that saves 25 bucks for each exemption claimed. For a husband and wife with two kids, the savings will add up to $150.
The standard deduction:
Which is used by nearly two-thirds of all taxpayers, will increase for each filing status. Singles will enjoy a $250 hike, to $5,700 from this year's $5,450. Married couples filing jointly will see their standard deduction rise to $11,400, $500 more than they will claim on 2008 returns. The standard deduction for heads of household who do not itemize deductions will increase $350, to $8,350 on 2009 returns.
The tax brackets:
Will become broader; meaning more of your income will be taxed at lower rates. The 10% bracket on 2008 joint returns will cover the first $16,700 of taxable income, Kiplinger's estimates. That's $650 more than in 2008. Taxing that amount at 10% rather than 15% will save couples $32. Not enough for a wild celebration, perhaps, but the higher your income, the more you save as more dollars fall into lower brackets. As the top of the 15% bracket rises, for example, some income that used to be taxed at 25% will be hit by the 15% rate.
Extra standard deduction for taxpayers 65 and older:
Married taxpayers age 65 and older will be allowed to add $1,100 to the regular standard deduction (the same as on 2008 returns) and singles will get an extra $1,400 (up from $1,350 in '08).
Kiddie tax trigger:
The amount of investment income a child under age 19 -- or a full-time student under 24 -- can earn before excess earnings are taxed at his or her parents' rate will rise to $1,900 for 2009, up $100 from 2008.
Tax credti of up to $7,500 for firt-time homebuyers:
If you purchased a primary residence after April 8, 2008 and are a "first-time" homebuter, you can qualify for a new tax credit equal to 10% of upt ot $75,00 of the purchase price. To be eligible, you must not have owned a residence in the United States in the previous three years. The credit phases out between $150,000 and $170,000 of adjusted gross income for joint fileers and $75,000 to $95,000 for single filers. It is refundable to the extend it exceed your regular tax liablilit - which menas that if it more than offsets your tax liability, you'll get a refund check - but does not offset the Alernative Minimun Tax.
Direct donations of IRAs to charity:
For 2009, IRA owners age 70 and a half and older can donate up to $100,000 of their IRAs to charity without having to report the withdrawal as income, and the donation is not included in taxable income. Amounts donated in this way count as all or paort of the IRA owner's required minimum distribution.
Section 179 depreciation deduction:
The Section 179 maximum deduction decreases to $133,000 from $250,000 in 2008. The phase-out threshold also decreases from $800,000 to $530,000.
HSA contributions:
HSA contribution limits have increased to $3,000 for individuals and $5,950 for families. An additional $1,00 may be contributed for those 55 and older.
IRA contributions:
IRA contribution limits have stayed at $5,000. An additional $1,000 may be contributed for those 50 and older.
Itemized deduction phase out:
Taxpayers will begin to lose the value of their itemized deductions after taxable income passes $166,800 for married and $83,400 for single in 2009; up from the $159,950 and $79,975 trigger points for 2008.
Personal exemption phase out:
The income levels at which the value of personal exemptions begin to disappear will also rise in 2009. For single taxpayers, the trigger point will be $166,800 (up from $159,950 in 2008); for married couples, $250,200 (up from $239,950); and for heads of households, $208,500 (up from $199,950). The rising trigger points save money for taxpayer with incomes above these levels.
Adoption Tax credit:
The credit increases to $12,000 for the adoption of an eligible child.
Hope college credit:
The maximum hope college credit remains at $1,800.
Tax-free parking and transit passes:
Employers will be allowed to give employees parking valued at $230 a month as a tax-free fringe benefit in 2009. The 2008 maximum is $220 a month. The tax-free limit for transit passes will rise from $115 to $120 a month.
Social Security wage base:
This amount -- after which the 6.2% Social Security tax no longer applies -- will rise from $102,000 in 2008 to $106,800 in 2009.
Estate tax:
The top rate remains at 45%, and the exemption amount increases to $3,500,000.
Gift tax:
The annual Gift tax exclusion amount increases to $13,000.
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