Tax Law Changes for 2009

Added April 15, 2009 by Samuel J. Tamkin

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Summary: The IRS has published the following following tax law changes for 2009 affecting individuals.

IRS Tax Law Changes for 2009 affecting Individuals

Alternative Minimum Tax (AMT) There are several changes affecting Alternative Minimum Tax for 2008 and 2009. http://www.irs.gov/formspubs/article/0,,id=207573,00.html

Child-Related Tax Changes Information on adoption benefits, child's investment income, and additional child tax credit. http://www.irs.gov/formspubs/content/0,,id=178788,00.html

Credit for Prior Year Minimum Tax There are several changes to the credit for prior year minimum tax. http://www.irs.gov/formspubs/article/0,,id=202445,00.html

Earned Income Credit The earned income credit amounts have increased for 2008 and 2009. http://www.irs.gov/formspubs/article/0,,id=180803,00.html

Economic Recovery Payment Information on new economic recovery payments and credits. http://www.irs.gov/formspubs/article/0,,id=207441,00.html

Education-Related Tax Changes Information on education savings bond exclusion, hope and lifetime learning credits, tuition and fees deduction, and student loan interest deduction. http://www.irs.gov/formspubs/content/0,,id=178787,00.html

Exclusion of Income for Volunteer Firefighters and Emergency Medical Responders For tax years beginning after 2007 and before 2011, gross income ... http://www.irs.gov/formspubs/article/0,,id=181049,00.html

Health/Medical-Related Tax Changes Information on Archer Medical Savings Accounts (MSAs), Health Savings Accounts(HSAs), and long-term care premiums. http://www.irs.gov/formspubs/content/0,,id=178789,00.html

Home/Residence-Related Tax Changes Information on mortgage insurance premiums, residential energy credits, and sale of main home by employees of intelligence communities. http://www.irs.gov/formspubs/content/0,,id=178791,00.html

Increase in Limit on Long-Term Care and Accelerated Death Benefits Exclusion New limits on exclusion payments made under a long-term care insurance contract. http://www.irs.gov/formspubs/article/0,,id=180804,00.html

Itemized Deductions The itemized deduction phaseout income limits have increased for 2008 and 2009. http://www.irs.gov/formspubs/article/0,,id=177998,00.html

Like-Kind Exchanges The exchange of stock in a mutual ditch, reservoir, or irrigation company may qualify for nonrecognition of gain or loss under section 1031. http://www.irs.gov/formspubs/article/0,,id=207284,00.html

Maximum Tax Rate on Qualified Dividends and Net Capital Gain Reduced There are changes to the maximum tax rate on qualified dividends and net capital gain. http://www.irs.gov/formspubs/article/0,,id=179793,00.html

New Rules for Children of Divorced or Separated Parents For tax years beginning after July 2, 2008 (the 2009 calendar year for most taxpayers), new rules apply to allow the custodial parent to revoke a release of claim to exemption that was previously released to the noncustodial parent on Form 8332 or similar form. http://www.irs.gov/formspubs/article/0,,id=207333,00.html

Penalty for Failure to File Income Tax Return Increased The failure to file penalty has increased. http://www.irs.gov/formspubs/article/0,,id=186746,00.html

Personal Exemptions The deduction amount and phaseout income levels have increased for 2008 and 2009. http://www.irs.gov/formspubs/article/0,,id=177992,00.html

Recovery Rebate Credit See if you are eligible for the recovery rebate credit. http://www.irs.gov/formspubs/article/0,,id=180800,00.html

Residential Energy Credits Information on residential energy credits. http://www.irs.gov/formspubs/article/0,,id=207332,00.html

Social Security and Medicare Taxes The maximum amount of wages subject to the social security tax and Medicare tax has increased for 2008. http://www.irs.gov/formspubs/article/0,,id=177943,00.html

Special Limitation Period for Retroactively Excluding Military Retirement Pay If you retire from the armed services based on years of service and are later given a retroactive service-connected disability rating by the VA, your retirement pay for the retroactive period is excluded from income up to the amount of VA disability benefits you would have been entitled to receive. http://www.irs.gov/formspubs/article/0,,id=207334,00.html

Special Rules for Individuals Impacted by Hurricanes Katrina, Rita, and Wilma Did you claim a casualty or theft loss deduction? http://www.irs.gov/formspubs/article/0,,id=207574,00.html

Standard Mileage Rate The standard mileage rate for business use of your vehicle, medical and move- related use and charitable use has increased for 2009. http://www.irs.gov/formspubs/article/0,,id=178004,00.html

Unemployment Compensation A portion of unemployment compensation received is excludable. http://www.irs.gov/formspubs/article/0,,id=207577,00.html

Wage Threshold for Household Employees The social security and Medicare wage threshold for household employees is... http://www.irs.gov/formspubs/article/0,,id=181051,00.html

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