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2008 Desk Guides

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					2008 FILING REQUIREMENTS FOR MOST TAXPAYERS
IF your filing status is ...
Single Married filing jointly

AND at the end of 2008 you were ...
Under 65 65 or older Under 65 (both spouses) 65 or olde~ j~ne spouse)",,\ 65 or older both snouses
Ao

THEN file a return if your gross income was at least.
S8,950 $10,300 $17,900 $18.950 $20,000 $3,500 $11.500 $12,850 $14,400 $15,450

Married filin se aratel Head of household Qualifying widow{er) with dependent child

Under 65 65 or older Under 65 65 or older

"

2008 FILING REQUIREMENTS FOR DEPENDENTS
If your parent (or someone else) can claim you as a dependent, use this chart to see il you must file a return. In this chart, unearned income includes taxable interest, ordinary dividends, and capital gain distributions. Earned income includes wages, tips, and taxable scholarship and fellowship grants. Gross income is the total of your unearned and earned income. Single dependents. Were you either age 65 or older or blind?

o No. You must file a return if any of the fOllowing apply.

o

• Your unearned income was over $900. • Your earned income was over $5,450. • Your gross income was more than the larger 01 • $850, or • Your earned income (up to $5,050) plus $300. Yes. You must file a return if any of the following apply. • Your unearned income was over $2,250 ($3,600 if 65 or older and blind). • Your earned income was over $6,500 ($7,550 if 65 or older and blind). • Your gross income was more than The larger of: Plus • S850 or } • Your earned income (up to $5,050) plus S300

This amount: $1,300 ($2.600 if 65 or older and blind)

Married dependents. Were you either age 65 or older or blind?

o No. You must file a return if any of the following apply.
unearned income was over $900. earned income was over $5,450. gross income was at least $5 and your spouse files a separate return and itemizes deductions. gross income was more than the larger of • $850, or • Your earned income (up to $5,050) plus $300. Yes. You must file a return if any of the following apply. • Your unearned income was over $1.950 ($3,000 if 65 or older and blind). • Your earned income was over $6,500 ($7.550 if 65 or older and blind). • Your gross income was at least $5 and your spouse files a separate return and itemizes deductions. • Your gross income was more than The larger of: Plus This amount: • $850, or $1,050 ($2,100 if } • Your earned income (up fo $5.050) plus $300 65 or older and blind) • • • • Your Your Your Your

o

OTHER SITUATIONS WHEN YOU MUST FILE A 2008 RETURN
You must file a return if any of the four conditions below apply for 2008. 1. You owe any special taxes, including any of the fallowing. a. Alternative minimum tax. b. Additional tax on a qualified plan, including an individual retirement arrangement (IRA). or other tax-favored account. But if you are filing a return only because you owe this tax. you can lile Form 5329 by itself. c. Household employment taxes. But if you are filing a return only because you owe this tax, you can file Schedule H by itself. d. Social security and Medicare tax on tips you did not report to your employer or on wages you received from an employer who did not withhold these taxes. e. Write-in taxes, including uncollected social security and Medicare or RRTA tax on tips you reported to your employer or on groupterm life insurance and additional tax on health savings account distributions. See the instructions for iine 63 on page 42. f. Recapture taxes. See the instructions for line 44. that begin on page 33, and line 63, on page 42. g. Additionai lax on a health savings account from Form 8889, Part III. 2. You received any advance earned income credit (EIG) payments from your employer. These payments are shown in Form W-2, box 9. 3. You had net earnings from self-employment of at least $400. 4, You had wages of $108.28 or more from a church or qualified church-controlled organization that is exempt from employer social security and Medicare taxes.

• I ...

Maximum credit for a child with special needs $11,650 Other adoptions, qualified expenses Up to $11 ,390 Phaseout range, modified adjusted gross income $174,730 - S214,730

DEPENDENT CARE CREDIT LIMITATIONS
To determine the amount of yoor credit, multiply yoor work-related expenses (aller applying the earned income and dollar limits) by a percentage. This percentage depends on your adjusted gross income shown on Form 1040, line 37, or Form 1040A, line 21, The following table shows the percentage to use based on adjusted gross inclXne. The maximum eligible to be multiplied by these percentages is 83,000 per child, maximum of $6,000 per return, OVER IF YOUR ADJUSTED GROSS INCOME IS: BUT NOT OVER THEN THE PERCENTAGE IS:
.W/e

Expense Limit Phaseout Threshold

•

$250,000 $800,000

<n
17000

" , nnn
19000

4"

21 2 25000
Social Security Wage Base Maximum Social Security Tax Medicare Wage Base Maximum Medicare Wage Tax $102,000 $6,324 No ceiling No ceiling

" "
27000

~ n:
3

33.000 7 4 43000

35.

a a
I

II

" " "
"

" "

Maximum interest deduction

$2,500

Modified Adjusted Gross Income Phaseout: Married Filing Jointly $115,000 - $145,000 Single/HOH $55,000 - $70,000

COMPARISON OF EDUCATION CREDITS
HOPE CREDIT Up to $1,800 LIFETIME LEARNING CREDIT Up to $2,000 Maximum lifetime learning rate is 20%.

•
AqualifyirlQ child lor purposes of the child lax credrt must be aU of the following: 1. Claimed as your dependent on line Be of Form 1040 or Form 1040A. 2. Under age 17 at the end of 2008. 3, Your. a, Son, daughter, adopted child, stepchild, or a descendant of any of them (for example, your grandcr~ld), or b. Brother, sisler, stepbrother, stepsister, or a descendant of any of them (fol example, your niece or nephew) whom you cared for as you would your own child, or c, Foster child (any child placed with you by an authorized placement agency whom you cared for as you would your OI'm child). 4. AU.S. citizen or resident alien. Adopted child. An adopted child is always treated as your own mild. An adopted child inc/t.des a child placed with you by an authorized placement agency lor legal adoption even if the adoption is not final. Akidnapped child is treated as a qualifying child for the child tax credit if ooth of the 1oI100'~ng slatements are true: 1, The child is presumed by law enforcEITrel1t authorities to have been kidnapped by someone who is nol a member of your family or the child's family, 2. The child qualified as your dependent for the part of the year before the kidnapping, This treatment applies for al years until the child is returned, However, the last year this treatment can apply is the ear1ier of: 1. The year there is adetermination that the child is dead, or 2. The year the child would have reached age 16.
Ki9JJ.aP.~

Equals 100% of first $1,200 in 1ualified expenses and 50% of the next 1,200 in qualified expenses. Available only until the first 2 years of post-secondary education are completed Available only for 2 years per eligible student Sfudent must be pursuing an undergraduate degree or other recognized educational credential Student must be enrolled at least halftime for at least one academic period beginning during the year No felony drug conviction on student's record

Available for all years of post-secondary education and for courses to acquire or improve job skills Available for an unlimited number of years Student does not need to be pursuing a degree or other recognized educational credential Available for one or more courses

Felony drug conviction rule does not apply

HOPE AND LIFETIME LEARNING CREDITS PHASEOUT
MODIFIED ADJUSTED GROSS INCOME PHASEOUT: Married filing jointly All other filing statuses $96,000 - $116,000 $48,000 - $58,000

SOCIAL SECURITY PAYBACK
At full retirement age or older Under full retirement age [n the year you reach full retirement age For 2008, full retirement age
IS

No limit on earnings $1 in benefits will be deducted for each $2 you earn above $13,560. Your benefits will be reduced $1 for every $3 you earn above $36,120.

65 years and 10 months.

TAX RATE SCHEDULES - SINGLE
TII.YllBlE INCOME:

TRADITIONAL IRA LIMITS
+%

VR
0.00
8,025

BUT NQTOVER 8025

TAX' TAX

ON AM

0.00
802.50 4481.25 16056.25 40052.25 103 9 .75

10

TOVER 0.00

IRA Contribution Limits (Does not participate in employer sponsored plan) Regular Contributions: 2008 Maximum Contribution ·Catch Up" Contributions for Taxpayers 50 and over: 200B Catch up

32,550

32550
8850 6 55

7"850
164550 357 0
...........

~;
28 35

8.025 32550 78850 164550

$5,000

35

00

357 00

$6,000

TAX RATE SCHEDULES - HEAD OF HOUSEHOLD
TAX'ABLE INCOME:

V 0.00 11 450 43650 12650 18240 357 00

BUT NOT OVER 11 450 43650 112650 182400 357700

TA<, T 0.00 1 145.00 5975.00 23225.00 42 755.00 00604.00

+%

ON AMQUNl OVER

10 15 25 28 33 35

0.00 11450 43650 112650 82 00 35 00

PHASEOUT OF IRA DEDUCTIONS
FILING STATUS
S· Ie 10< Married FiitIg mg $0""",1' andMd

AGt BEGIN AGI FULLY PHASEOUT PHASED OUT
S53,000

S 63,000
$105,000

TAX RATE SCHEDULES - MARRIED FILING SEPARATE
TA<ABLE INCOME, OVER BUT N TOVER 0.00 8025 8025 32550 32550 65725 65725 100150 100150 178850 78850 TA<, T 0.00 802.50 4481.25 12775.00 22414.00 48385.00
%

opa<t lrom 'PO!JS& b .. n(2008)

Married Filing Jointlv

M
0.00

ER

($1Sl3.00J hpous" is not oovn:I til' I ptnsion _

585,000

($lli6.OOl ~ """" is not COWI1!d

10 15 25 28 33 35

til' a peoslon!Ull

8025 32550 65725 100150 178850

Married Filing Separate $ Head of Household Qualifying Widow(er)

0.00

S 10,000

$53,000 $85,000

S 63,000
$105,000

TAX RATE SCHEDULES - MARRIED FILING JOINTLY OR QUALIFYING WIDOWIERj
TAXABLE INmMF, BUT NOT VER 0.00 16050 16050 65 100 65100 131 450 131450 200 300 200300 357700 357700 TAX, TAX 0.00 1 605.00 8962.50 25 550.00 44828.00 96770.00

+'

VR
0.00

10 15 25 28 33 35

16050 65100 131 450 200300 357700

2008 CORPORATE TAX RATES
~B TNQTQVER
0.00 50000 75000 100 000 335 000 10000000 15000000 18333333 50000 75000 100000 335 000 10 000 000 15000000 18333333
TAXABL!= 1r>.lr"ME:

TAX' TA 0.00 7500 13750 22250 113900 3400000 5150000

+%

NA

15 25 34
39

34 35 38 35

T VER 0.00 50000 75000 100000 335000 10000000 15000000 0.00

A qualified personal servICe COflKlratlO11 IS taxed at a flat rate of 35% on taxable Income,

2008 ESTATE AND TRUST TAX RATES
~LE INcnMF,
~

TA<·
+0

TN T

0.00 2 200 5150 7 850 10700

VE 2200 5 150 7850 10 700

0.00 330.00 1 067.50 1 823.50 2764.00

15 25 28 33 35

0.00 2200 5150 7850 10700

Compliments of Drake Software

(Drake" . . . . ···1··i·.
800.890.9500

DrakeSoftware.com Info@DrakeSoftware.com

ALTERNATIVE MINIMUM TAX
Frst $175,000 (Sa7.soo married, separate) of Alternative MiniTun Taxabl<! Income Over 5175,000 of Alternative Mmun Taxable Income
EXEMPTIONS: Married Filing Jointly or Qualifying Wldow(er) Mamed Filing Separate Single or Head of Household EXEMPTION PHASEOUT: 25% of amount AMTI exceeds: Elrng Stalus MFJlSurviving Spouse SinglelHOH Married Filing Separate

26"
28"
569,950 $34,975

546,200

AGI Begin Phaseout

AGI Fully phaseout

5150,000
$112,500 S 75,000

5429,800 5297,300
5214,900

WHERE TO DEDUCT YOUR INTEREST EXPENSE
AND FOR MORE IF YOU HAVE...
Deductible sludenlloan interest
Deductible home mortgage interest
and points reported on Form 1098

THEN DEDUCT IT ON...
Form 1040, line 33 Of Form 1040A, line 18

INFORMATlON GO TO...
Publication 970

Deductible home mortgage interest
not reported on Form 1098

Deductible points nol reported

on Form 1098 Deductible investment interest (other than interest incurred to
produce rents or royalties) Deductible busifIess I1terest

Schedule A (Form 1040), lil"ie 10 Schedule A (Form 1040), liM 14 Schedule A jForm 1040), line 12
Schedule A (Fonn 1040), line 13 Schedule C or C-EZ

Publication 936
Publication 936

Publication 936
Publication 550

Publication 535
Publications 225 and 535 Publications 527 and 535

(norrlarrn)
Deductible farm business interest Deductible interest incurred to produce rents or royalties Personal interest

~""'lWJ)
Schedule F (Fonn 1040) Schedule E (Fonn 1040) Not Deductible

2008 STANDARD MILEAGE RATES
Business Mileage January 1 - June 30, 2008 Beginning July 1, 2008 Beginning January 1, 2009 January 1 - June 3D, 2008 Beginning July 1, 2008 Beginning January 1, 2009 50.5 cents/mile 58.5 cents/mile 55 cents/mile 14 cents/mile 19 cents/mile 27 cents/mile 24 cents/mile

Charitable Mileage Medical/Moving Mileage

ESTATE EXEMPTION
t
Unlimited

$4,000,000 1.-+---------""-1 $3,500,000 1.-+---------1 $3,000,000 I . - + - - - - - - - - - { $2,500,000 1.-+----...,.....,.......--1 $2,000,000 1..+---,;.--..01 $1,500,000

1_-1

-f

$1,000,000 "''''' $500,00:

; U . .J!:!!~..._ ..........Jr'

~~U j

2003 2004 2005 20062007 2008 2009 2010 2011

EARNED INCOME CREDIT
Single, Head of Household, and OIJalifying Wido,~er)
With No Children With One Child With Two Children

Earned Income Ranges to Receive the Maximum EIC

Maximum EIC Amount

Maximum Earnings Before EIC EIUninated

Married Filing Jointly
With No Children With One Child With Two Children

Earned Income Ranges to Receive the Maximum EIC

Maximum EIC Amount
$438
$2.917

Maximum Earnings Before EIC Eliminated

FROM
$5700 $8,550 $12 050

TO
$10200

I

$18750
~18 750

$4824

$15,880 $36.995 $41 646

The maximum amount of Investment income you can have and stili receive EIC has IrlCreased to 52,950.

EARNED INCOME CREDIT IN A NUTSHELL
First, you must meet all the rules in this column.

Second, you must meet all the rules in one of these columns, whichever applies.

Third, you must meet the rule in this column.

Part A
Rules for Everyone
I. Your adjusted gross income lAG' must be less than S38.646 {S41.5::5 tor mar· ned filing lOOt) If you have more than one QUailyI'lg chikl.

Part B
Rules if You Have a Qualifying Child
8. Your child must meet the relationship. age, and residency tests. 9. YOll" qua Ilying child cannot be used by more thall one person to claim the EIC. 10. You caMOl be a qualifying child of another person.

Part C
Rules if You Do Not Have a Qualifying Child
11. You must be at least 25 but under age 55. 12. You cannot be the dependent of another 13.You caMOt be a QUaityYIg ch*J of another person. 14. You must have lived In the UllIted States more than half of the year.

Part 0
Figuring and Claiming the EIC
15.Your earned income must be less than $38,646 {S41.645 for mamed filing joint) if you have more than one qualifying child. S33.995 ($36.995 lor married filing joinq if you have one QUabfyIlg child. 512.880 (515,880 for married not have a qualifying child.
~1Iing

S33.995lS36.9951cJ mamed fiIrlg jOUlq
If you have one ~ d*l
512.880 (515.880 fer mamed filing JOlflt) If you do not have a qualifylng child.

""""'-

Joint) if you do

,

Y~ must have a vali:l SOCial secunty number. 3. Your filing status cannot be "married filing separate." 4. You mtJst be aU.S. citizen or resident atien aI yeat. 5. You caMOt file Form 2555 or Form 2555-EZ (relatilg to foreq, eaned

6, Your ilvestment income 10051 be 52.950 7. You must have earned lIlCome.

""""I.

'" ""'.

EXEMPTION AMOUNTS
Personal and Dependent
Estate ArnolI"rt Sinple Trust •

PHASEOUT POINTS FOR EXEMPTIONS
TYPE Of TAXPAYER

S3,SOO
$600 $300 $ '00

PHASEOUT BEGINS
5159,950 5239,950 5119,975 $199,950 $239,950

PHASEOUT ENDS
$282,450 5362,450 5181,225

5ngIe

M"""" FOing JOOUy
Married Filing Separate Head of Household Qualifying Wtdow(e~ with Dependent Child

Complex Trust·
• Exemption Not Allowed in Final year

5322,450
5362,450

Compliments of Drake Software • 800.890.9500 • DrakeSoltware.com • infoODrake$ottware.com

STANDARD DEDUCTIONS
IF YOUR FlUNG STATUS IS... Paid preparers who file EITC returns or claims for refunds for clients must meet four due diligence requirements. Those who fail to do so can be assessed a $100 penalty tor each failure.
1) Complete Form 8867, Paid Preparers' Income Credit Checklist, or your own equivalent form. (Drake Software allows you to print this form,)

BASE AMOUNT

ADDITlONAL AMOUNT FOR BUNONESS OR OVER AGE 65

Married Fiing pntly Married Fling Separate

$5,450 $10,goo 55,450
S8,000

Head of Household
Qualifyilg Widow(er) with De~t Ch"id Dependent of Another

$10,!XXl $900 or Earned Income +$300

$1,350 $1,050 $1,050 $1,350 $1,050
$1,0500r$1,35O if silgle or HOH

2) Keep the appropriate EIC worksheet found in the Form 1040, 1040A, or 104Cl:Z instructions or in Publication 596, or your own equivalent form, 3) You must have no knowledge that any of the information used to determine the taxpayer's eligibility for the credit and the credit amount is incorrect. 4) Retain Fonn8867 and the EiC worksheets (or your own equivalents of each), and arecord of how, when, and trom whom the infonnation used to prepare the form and worksheet(s) was obtained. You must keep these dooJments for three years trom June 30 foliowing the date the return or claim for refund was presented to the taxpayer tor signature. (In Drake Software, Form 8867 includes aplace tor the taxpayer, spouse, and preparer to optionally sign and date, ../him helps mool this requirement.)

MACRS RECOVERY PERIODS
MACRS RECOVERY PERIOD General Alternative Depreciation Depreciation System System

Type of Property Computers and their peripheral equipment Office machinery, such as: Typewriters Calculators Copiers Automobiles Light trucks Appliances, such as: Stoves Refrigerators Carpets Furniture used in rental property

5 years

5 years

5 years 5 years 5 years

6 years 5 years 5 years

5 years 5 years 5 years

9 years 9 years 9 years

2008 Premium for High Deductible Self-coverage $1,950 - $2,900 Family Coverage $3,850 - $5,800 Maximum Out-of-Pocket Self-coverage Family Coverage

Office furniture and equipment, such as: Desks Files Any property that does not have a class life and that has not been designated by law as being in any other class Roads Shrubbery Fences Residential rental property (bUildings or structures) and structural components such as furnaces, water pipes, venting, etc. Additions and improvements, such as a new roof

7 years

10 years

$3,850 $7,050

7 years 15 years 15 years 15 years

12 years 20 years 20 years 20 years

2008 Maximum Annual Contribution Limits Seil-coverage $2,900 Family Coverage $5,800 2008 Minimlnl Deductible Self-coverage Family Coverage 2008 Maximum Out-ot-Pocket Self-coverage Family Coverage Additional Over Age 55
2008 $900

27.5 years

40 years

$1,100 $2,200

$5,500

$11,200

The same recovery period as that of the property to which the addition or improvement is made, determined as if the property were placed in service at the same time as the addition or improvement.

2009 and after

$1,000

Compliments of Drake Software 800.890.9500 • DrakeSoftware.com • info@DrakeSoftware.com

e
By Sherr; Huff £A ((lid Krlly Ihrn

§179 Expensing
For 2008, taxpayers may expense up to $250,000 of qualilY~ ing property acquired For use in a trade or business. The

Bonus Depreciation
Thc 50-percent bonus depreciation is back for 2008. The original usc of the property muSt commence with the taxpayer (i.e., it applies to the purchase of new property). Qualified property must have been acquired by purchase after 2007 :llld before 2009. • If a binding comract to acquire the property existed before 2008, the property does nOt qualifY. • Property muSt be placed in service after 2007 and before 2009 (before 2010 for certain rmnsportation property and cerrain property with a long production period). Qual ified property includes tangible property depreciated under

deduction phase-our begins at $800,000 on purchases of qualifying properry.
For 2009, taxpayers may expense up to $133,000 of qualifying property acquired for use in a tmele or business. The deducrion phase-our begins at $530,000 on purchases of

qualifying property.
For tax years 2003-20 I0, the taxpayer may nuke or revoke a § 179 election on an amended rc('Urn without the consent of the Commissioner.

NlACRS wirh a recovery period of 20 years or less, water urility

Addresses: Where to File
Visit
IVlIJIV.lllltpltlx.com,

Federal Tax InFormation,

T.'lX

News.

Where to File 2008 RetLlrns in 2009, for currcfH addresses.

Adoption
The maximum credit for 2008 is $11,650 pcr adopted child. The credit will begin (Q be phased out for taxpayers when modified adjusted gross income (MAGI) excecds $174,730, and is complctely ph:tSed out when MAGI rcaches 52\4,730. The credit is $12,150 for 2009. The credir will begin to phase our when MAGI exceeds $182,180 and is completely phased our whcn IvtAGI reaches $222,180.

property, off·the-shclf computer software, and qualified leasehold improvcment property. Qualified property does nOt include: Property placed in service and disposed of in the same year. • Properry converted from business use 1'0 personal usc in the same tax year. Propcrry depreciated under the alternative depreciarion system (ADS). • Properry For which the taxp:tycr eleers not to claim rhe special bonus depreciation allowance. Fisca.! year 1~lxpa}'ers whose ta.x year began in 2007 and ended in 2008 should use Form 4562-FY, Depredation alld Amortiwtion, if they meet the crireria (i.e., acquired or entered intO a binding COntraCt of eligible property after December 3\, 2007, and pbced the property in service during the fiscal year, etc.). See the Luxury Auromobile Depreciarion Limits on page 8 For the effects of bonus depreciation on the limits allowed for Ihe first-year deprecation of a luxury automobile.

Alternative Minimum Tax (AMT)
For 2008, the AlvtT exemption :tmoullts are:ts follows:

-

2008
Exemption

2008 Phase·Out $150,000 - 429,800 $\12,500 - 297,300 $75,000 - 214,900

M FJ,QW MFS

$69,950 546,200 $34,975 $6,400
(Rev. Proc. 2007-66) plus child's earned incomc not to exceed $46,200

S, HH

Capital Gajns Rates
Rates are 0 percent and 15 percent for 2008 through 20 IO.

For a child
subject to kiddie tax

Child and Dependent Care Credit
$112,500 - 297,300
The minimum child and dependent care credit is 20 percent and the maximum is 35 percent based on AGI. The amount of eligible expenses is $3,000 for one child and $6,000 for rwn or morc children. January 2009 NAT? TAXPRO Monthly

5

Child Tax. Credit For 2004-2010, dle maximum child tax credit is $1,000 for each qualifying child. For 2008, the child taX ctedit is refundable the extenr of the greater of: 15 percent of earned income above $8,500 for 2008, or The excess of the taxpayer's social security taxes for the year over the earned income credit for the year for tax~ payers with three or more qualifying childten.
to

2009 Earned Income Tax Credit Taxpayer With one child Wit'h tWO or more children \Xtit'h no children

MFj
338.583 $43,415 316,560

Other T an MFj

Maximum Credit

135,463 $40,295 313,440

$3,043 $5,028 3457

2008 Daycare Optional Meal and Snack Rates

Type of MeaJ
Breakfast Lunch and Supper Snack

Contiguous States

Alaska

Hawaii

The maximulll amount ofinvcstmenr income <l t'axpayer may have and still be eligible for d,e credit bas increased to $3,100 for 2009.

31.11 32.06 30.61

31.76 33.34 30.99

31.29 32.41 30.72

Education Credits For 2008 and 2009, the maximum Lifctime Learning Credit is $2,000 ($4,000 for individuals who attend an eligible education:l) institution lOC:ltcd in the Midwestern Disaster Area). The maximum Hope Credit is $1,800 ($3,600 for individuals who attend an eligible educational instirution located in the Midwestern Disaster Area). For 2008, the Lifetime Learning and Hope credits are phased when m<lrried filing joint taxp<l)'ers' MAGI is befween 396,000 ""d $116,000 (3100,000 "nd $120,000 foc 2009). For all others, the phase-out is between $48,000 and 558,000 ($50,000 and $60,000 for 2009). The credit is nor allowed if the t:lxpayer is married filing sep<lr:ucly.
Ollt

2009 Daycare Optional Meal and Snack Rates Type of Meal Breakfast Lunch and Supper Snack Contiguous States Alaska Hawaii

31.17 32.18 30.65

31.86 33.53 31.05

31.36 32.55 30.76

Elective Deferrals
Dividend Rates Qualified dividends are taxed at 2008 through 2010.

°

percent and IS percent for

Earned Income Tax Credjr For 2008, the maximum alllount of income a taxpayer cnn
earn and still be eligible for rhe earned income credir incrensed. If earned income or AGJ is at or exceeds the following amOllnrs, the earned income credit will be zero. 2008 Earned Income Tax Credit Taxpayer With one child \Xlith lWO or more children Wid, no children

The maximum amOllnr of dective deferrals under a salary reducrion agreement rhat cOllld be conrribured 1'0 a qualified plan is $15,500 for 2008 ($20,500 if rhe taxpayer was <lge 50 or over) and $16,500 for 2009 ($22,000 if the taxpayer was age 50 or over). For SIMPLE plans. the elective deferral is $10,500 for 2008 ($13,000 if the taxpayer is <lge 50 or over) and $11,500 for 2009 ($14,000 if the taxpayer is age 50 or over).

Exemption Amounr
Maximum Credit The personal exemption amOUlH increased to $3,500 for 2008 :lnd $3,650 for 2009. A taxpayet m<ly lose all or a parr of his/her exemption if his/her AGJ is above <l cerrain amOUllt. The phase~oLlt AGI is:

MFj
3$6,995 341,646 315,880

Other Than MFj

333,995 338,646 312,880

$2,917 $4,824 3438

..
MFj,QW

2008
Phase~Out

2009
Phase-Out

$239,950 - 362,450 3199,950 - 322,450 $159,950 - 282,450 $119,975-181,225

3250,200 - 372,700 3208,500 - 331,000 3166,800 - 289,300 3125,100 - 186,350

HH
The maximum amount of investment income a taxpayer may have and still be eligible for the credit has increased to $2,950 for 2008. For 2009, the maximum alllount of income a taxpayer C<ln earn and still be eligible for the earned income credir increased. If earned income or AGJ is at or exceeds Ihe following <lmOlllltS, the c:lrned incomc credit will be "lcro. Single

MFS

Under [he Economic Growth and Titx ReliefReconciliation Art 0/2001, the exemption amOunt in 2008 for taxpayers with an AGI in excess of rhe maximum phase-oUT is $2,333 ($3.500 x 2/3). ~or 2009 it is $2,433 ($3,650 x 2/3).

6

NATP TAXPRO Monthly January 2009

First-Time Homebuyer Credit (Form 5405) For principaJ residences purchased after April 8, 2008, and before July 1, 2009, a fim-time homcbuyer can claim a ctedit equal to the lesser of: 10 percem of the purchase price, or • $7,500 ($3,750 if married filing separate). Wirh a purchase between January I, 2009, and June 30, 2009, the taxprtyer Gll1 eJcCI to treat the purchase as made on December 31,2008, thereby allowing rhe mxpayer [Q claim the credit on the 2008 tax rerum. The maximum ctedit is phased our fot taxpayers with a MAGI between $75,000 and $95,000 ($150,000 and $170,000 for joim returns). Foreign Earned Income Exclusion For 2008, a qualifled individual may exclude up to $87,600 of qu:tlified foreign earned income llsing Form 2555, Foreign Ettrned II/come. For 2009, the indexed amount will be $91,400. Health Savings Accounts (HSAs) Like lltAs, fUnds saved in HSAs are I OO-percent mx-deferred until distribution. Taxpayers may contribute the lesser of rhe annual deductible for medical insurance coverage, or up ro $2,900 for singles, or $5,800 for families for 2008. For 2009 it is $3,000 for singles, or 55,950 for families. There is an addirional catch-up provision of $900 in 2008 and $1,000 in 2009 (and thereafter.)

2008 MAGI Phase-Out for Roth IRA Contributions
Filing Status Phase-Out Phased Out Begins When When MAGI MAG I Exceeds Exceeds $159,000 $0 $101,000 $169,000 $10,000 $116,000

MFj
MFS (lived with spouse)

S, HH, QW, 0' MFS if taxpayer did not live wirh spouse at any time during the year

2009 MAGI Phase-Out for Roth IRA Contributions
FiJiilg Status MFj Phase-Out Phased Out Begins When When MAGI MAGI Exceeds Exceeds $166,000 $176,000 $0 $105,000 $10,000 $120,000

MFS (lived with spollse) S, HH, QW, DC MFS
if taxpayer did nor live with spouse ar any time during the year

Kiddie Tax
Kiddie ta.x applies ['Q a child who: Has nor alrained age 18 before the close of the raxablc year, or who is a full-time student who has anained age 18 before the end ofthe tax year, bur is nor YCt age 24 and whose earned income docs not e.xceed one-half of the child's suppOrt, • Either parent of such child is alive at the dose of the taxable year, and • Docs not me a joint return for the taxable year. Long.Term Care Premiums Paid During 2008

IRA: Contribution Limit to Traditional and Roth IRAs For 2008 and 2009 the contribution limit ro a Traditional or ROth IRA. is $5,000 ($6,000 for taxpayers age 50 and over). 2008 Deduction Phase-Out for Traditional IRAs MAGI Phase-Out for Traditional IRA Deductions Taxpayer Covered by an Spouse of Covered Employer Plan Employee S, HH MFj $53,000 - 63,000 $159,000 - 169,000 MFj, QW MFS $85,000 - 105,000 $0 - 10,000 MFS'" $0 - 10,000
'If laxpa)"er is filing MFS and did nOI live Wilh spouse al any lime during th~ yrar, h"'sh~ is considered Single for IRA deduction purposc.l.

In the case of an individual with an attained age before the close of the tax year of:
40 or More More More More less than than rhan than 40 but nOt morc than 50 50 but nor morc than 60 60 bur nor more than 70 70

2009 Deduction Phase·Out for Traditional IRAs

The annual limitation on deductible premiums is: 5310 $580 $1,150 53,080 $3,850

MAGI Phase-Out for Traditional IRA Deductions
Taxpayer Covered by an Emp:loyer Plan S, HH $55,000 - 65,000 MFj, QW $89,000 - 109,000 MFS' $0 -10,000 Spouse of Covcred Employee MFj $166,000 - 176,000 MFS $0 - 10,000

Long-Term Care Premiums Paid During 2009

In the case of an individual with an attained age before the dose of the tax year of:
40 or More Morc More More less rhan than rhan than

The annual limitation on deductible premiums is:
$320 $600 51,190 53,180 $3,980

•If laxpayer is filing MFS and did nol liye with spollse al any time during lhe r~r, held'e is considered Single for IRA deduction purposes.

40 but nor more than 50 50 but nOt morc than 60 60 but not more than 70 70

January 2009 NATP TAXPROMonthly

7

2008 Luxury Automobile Depreciation Limits
Period AUlomobiles

Trucks and Vans $3,160 ($11,160 if claim 50% bonus depreciation) $5,100 $3,050 $1,875

\ Sf

year - 2008

2nd year 3rd year Succeeding years

$2,960 ($10.960 if claim 50% bonus depreciation) $4,800 $2,850 $1,775

contribUtions ro a qualdied retirement plan or a 403(b) annuity. The credit tate (SO, 20, or 10 percent) depends on rhe taxpayer's filing statuS and modified ACl. The maximum annual credit is $1 ,000 ($2,000 if married filing joindy). The amount of any eligible conrriburion is reduced by cerrain rctiremenr plan distributions received by the taxpayer and spouse during a "testing period."

Self-Employment Optional Methods
Before 2008 the dollar thresholds were not indexed for inflarion. In 2008, thc following dollar limits apply: • Under the farm oprionalmedlOd, if the individual's gross farm income is $6,300 or less. or nct fum inCOme is Jess than $4,548, nCt earnings from self~employmenr equal the smaller of two~thirds of gross f.·um income (not less than zero) or $4.200. • Under the nonfarm optional method, if the net nonfarm incomc is less than $4,548 and less thall 72.189 percent of gross nonf.'lrm income, and net earnings from self~ employmelll were at least $400 in (\\10 of rhe prior three years, net earnings from sclf~employmenr equal rhe smaller of (\\Io-thirds of gross income (not less than zero) or $4.200.

Meal Expenses When Subject to "Hours of Service» Limits Generally. a taxpayer may only deduct SO percent ofbusiness~ related mcal expcnscs for traveling away from his or her tax home. A taxpayer may dcducr a highcr percentage if the meals takc place during or incidenr to any period subject to rhe Department ofTransporration's "hours or service" limits. Fat tax ye:1TS beginning in 2008 and thereafter. the deductible percentage is 80 percent.

(Archer) Medical Savings Accounts (MSAs) The allowable plan limits for 2008 arc as follows:

•

Sclf~only

$1,950 - 2,900 $3,850 - 5,800

•

Annual Maximum Deduction

Social Security
For 2008, the maximum wages subjecr to social security ta.x increased ro $102,000 ($106,800 for 2009).

$3,850 $7,050

Family

6S% of deductible 75% of deductible

Smndard Deduction
ror 2008, taxpayers who arc claiming the standard deduction can also claim a rcal property tax deduction. The real propcrty tax deduction equals the lesser of: • The amount allowable as a deduction on Schedule A for state and local real property raxes, or • $SOO ($1,000 for a joint rerum). The basic standard deduction has increased
a..~

Nanny Tax
For 2008, FICA for domestic service in an employer's horne is nOt required unless the cash wages paid arc $1,600 or mOI'c ($1,700 foc 2009).

follows:

Pcr Diem Allowance For Transporlation Industry According to Rev. Proc. 2007-63 and 2008-59, the special tra.nspoTttlt'ion industry per diem rates are $S2 ror CONUS and $58 for OCONUS during both periods, October I, 2007, to September 30, 2008. as well as OClOber I. 2008, to September 30, 2009.
Saver's Credi t A saver's credit can be cbimed using Form 8880, Crulit for Qualified Retirement Savillgs COlltributious. by: • Married couples filing jointly with incomcs tip [Q $53,000 in 2008 or $5S.500 in 2009. • Heads of Household with incomes up [Q $39.750 111 2008 or $41,625 in 2009. • Marricd individuals flling separarely and singles with incomes up ro $26.500 in 2008 or $27.7S0 in 2009. Eligible taxpaycrs can claim a nonrefundable credit against income rax and AMT for elective contributions to 401 (k) plans, 403(b) annuities, §457 plans, SIMPLE and SEP plans, lmditional or Roth IRAs, and voluntary aftcr~tax employee

Filing Status

2008 $10,900 $8,000 $5,450 $5,450

2009 $11,400 $8,350 $5,700 $5,700

MF]IQW HI-l Single MFS

For 2008. the smndard deducrion for dependents who only have unearned income is $900 (for 2009, it increases ro $950). If the dependent has both earned and unearned income, the standard deduction is the greater of: • $900 (for 2009, it increases to $950); or The dependent's earned income plus $300 (the same for 2009), but not more than the basic Standard deduction for his or her filing status. For 2008, additional deductions for the aged or blind are $1 ,050 for married or SlI rviving spouse and $1 ,350 for si ngle or head of household [axpayers. For 2009, additional deductions for the aged or blind are $1.100 for married or surviving spouse and $1,400 for single or head of household taxpayers.

\

8

NATP TAXPROMonrhly

January 2009

Standard Mileage Rates
Purpose Business Medical and Moving Charirable Charirable (core Midwestern disasrer area)'-

2008 Tax Laws Enacted
• El1le1gmcy Economic Stabiliwtioll Act 0[2008, Ene/g)' /mprovemem and Extension Act 0[2008, and "Tax Extenders tllld Altenuuive J\1inimlll1l 'Tax ReliefAct of

--50.5<
19¢. l4¢.

58.5<
2]/,f.

55<

2008 (HR 1424)
• • • Homing Assistance 7f/x Act 0[2008 (H. R. 322 [) Heroes Earnings Assistance and Reliej7flx Act 0[2008

24¢

14q;

14ft

(H.ll.6081)
Food, COllJCTlltltioJl, tlnd Energy Act of2008

36<

41<

14<

(a.k.a. The Farm Bill)
• ECOl/omic Stimulus Act 0[2008 (H.R. 5140)

"Beginning on the applicable disasrer date, which varies from May 2,2008, to June 27, 2008.

Visit WIIJIV.lltltptflx.com for summaries of these bills. Click on Federal Tax Informarion, then Tax Act Summaries.

2008 Tax Rates
Filing Status Single

10% $0 $0 $0 $0

15% $8,026 $16,051 $8,026 $11,451

25% $32,551 $65,101 $32,551 $43,651 2009 Tax Rates

28%

33% $164.551 $200,301 $100,151 $182,401

35% $357,701 $357,701 $178,851 $357,701

$78,851 $131,451 $65,726 $112,651

MFJ/QW MFS

HH

Filing Status Single

10% $0 $0 $0 $0

15% $8,351 $16,701 $8,351 $11,951

25% $33,951 $67,901 $33,951 $45,501

28% $82,251 $137,051 $68,526 $117,451

33% $171.551 $208,851 $104,426 $190,201

35% $372,951 $372,951 $186,476 $372,951

MFJ/QW MFS

HH

Form W-2: Where to report reimbursements and benefits* Not applicable to greater-than-2~percent shareholders or highly compensated employees
Employee Fringe Bcnefits Accidellt and Health Bcnefits (Sec Footnotc 3) Accident and health benefits Olher than long-term carc premillllls Long-tcrm c:Jrc premiums paid through a cafeteria or nex spemJing accoum Long-term carc premiums nOt paid through a cafcteria or NOll-Cash ,'chic,·ement Awards (Sec Footnolc 2) Box 1 Box3&5 Unx 10 Box 12 Code Box 13 Box 14

'" yd
0"

y"
no

'"

nex SI)ending account

"" '"
0" 0" 0'

0"

0"

0'

""
0" 0" 0"
yes

""
0" 0" 0"
T T
00

"" ""
optional

Up to $1,600 from:t qualified plan or $400 from a non-qualificd pbn
The amount Ol'er $ 1,600 from a qualified plan or $400 from a non-quali!1ed plan Adol>lion Assistance (Sce 1'001110le I) Paid from an adoption :miStallCC progr:tm Paid or reimbursed from a cafeteria plan Forfeited from a cafeteria plan Dependent Care Assistancc Programs (Sec 1'00t110te I)

""
)'"

""
y"

0"

,'"
yd

""
~'lFJ or $2,250

0"

0" 0"

"" ""

y"

0"
0"
00

0"

0"
0'

Cash reimbursementS up 10 limirs 0[S5,000

MFS or Single
UI

FMV of on-sile facilities less thc amoulll paid by employee up $5,000 MFJ or $2,250 MFS or Single Amounr reimbursed or value in excess of abovc Slated limits

limits of

'"
0"
y"

y"
y"

'"
0'
optional

'"
y"

""
"0

00

yO'

0"

, Chan continued on page 10. Footnotes listed at the bonom.
January 2009 NATP TAXPROMonthly

9

Form Wp2: Where to report reimbursements and benefits Not applicable to grearer-than-2-percem shareholders or highly compensated employees
Employee Frin~ Bendils Educational Assistance (See Footnote 2) Up
10

Bo~

I

Bolt3&5

Box 10 Box 12 Code Box 13

Bo~

14

S5,250 paid from a qualifkxl phn to maim:iin or impro\'e job skills

Excess of $5,250 or paid from a non-qualifying plan but considered a working condirion fringe benefit Paid as a working condition fringe henefit Excess of $5,250 or paid from a non-qualifYing plan and not considered a working condilion fringe benefil Employee Discounts (See FoornOle 2) Discounts not in excess of 20 percell[ of services DiscoulIIs
nOi

'"
'"
0O
)'~

'"

""
'w

"0 "0

'"

'"
'w
yes

'"
'"
"0

'"
'w

'" '"
,w

'" '" '" '"
'w

in excess of rhe employers cost

'"
yes

,w

'"
00

Discounts ill excess of above limils Group-Term Life lnsurnnce PremiulIls (See FOOUlotes 5 & 6) Paid Paid Paid
10
10
(Q

'"
"0

'"
y~

,w

,w ,w 'w 'w

'"
00
y~

'" '" '"
00

'" '"

,w

currelll ant! former employees lor up

to

S50,000 of cover.tge

,w
y~ y~

current employees ill excess of550,000 of co,-er.tge up to FICA wage limit former employees in excess of S50,000 of coverage
Savillg~

)'~

C
}"l&N

res

)'~

Health

ACCOlln{$ (!-ISAs) (Sec F"oUlOtc 2)

,w 'w
)'~

no

Moving f:$pense Reimbursemen{$ (Sec Footnote 4) Paid or teimbursed deductible moving expenses l'aid or reimbursed non-deductible moving expenscs Qualifie,! Transportation Benefi{$ (Sec Footnote 4) Paid or reimbursed up to tlte following monthly limits: • S\ \5 per month for combined commuter highway vehide tr.tnsportalion and tr.tllsit p~sses • $220 per month for q[[~lified p~rkil1g !'aid or rcimbu=d in excess of the above monthly limits ReimburSClIIen{$ For Employee Business Expenses Pcr diem, less rhan govcrnmcrtl rate (subst3.miatcd) Per diem, eqllalto governmcnt rate (not
substallli~ted)

'"

yes

W
I'

'" '" ""
'w

'w

'" '"
'w
oplional

'"
y~

'"

y~

,w

'"
'w ,w 'w

'"
'w
"0

'w
,~

'w
y~

'"
,w ,w

'w
oplional Box: 14

Box I

Box3&5

Box 10 Box 12 Code

Box 13

'w 'w

"'
'"
'w
res

'w

"'

Per diem, up to government r.tte (subsmntiated) Per diem, in excess of government r.ttl: (substantiated)

'"
yes

"" ,w
'w

'"
y~

'w 'w ,w

"' '" 'w
'"

'" '" 'w "" '"

AllY amOlllH, other titan a pcr diem amOUlH (substantiared)
Any amount, other than a per diem amount (not substalllialed) Fooilloies

,w
)'~

'w
,.~

,w
00

"'

(J) For dlis exclusion. a highly compensated employee for 2008 is an employee who meets either of the following tes(:;: Tlle employee was a S-pcrCent ownet at any time during the yc~r Ot the preceding year. TIle employee rcCt·ivcd more than $ I 00,000 in pay for the preceding year.

(2) For this exclusion, any employce who received more than $100,000 in pay for 2007 is a highly compens:ned employee.

(3) A highly compensated employee for rhis exception is any of the following individuals:
One of lhe five highest paid officers. An employee wllo owos (directly or indirectly) Illore tlJ;tn 10 percent in value of the employet's stock. ;\n employee who is among the highest paid 25 peTCt'nl of all employees (orher than those who can be excluded from the plan).

(4) The highly compeos:ltcd employee rules do not apply due to the natUfC oftlle benefit.
(5)
For this exclllsion, a key employee during 2008 is an employee or former employee who is olle of the following individuals:

All officer having al1nual pay of more than $150,000.
An IOdivi{luaJ who for 2008 was eilher of rhe following:
(a) A 5-percent OWllr.:r ofyollr busil1e~s. (b) A I-percent owner ofyollr business whose annual pay was more than $150,000. See §4l G(i) of the Internal Revenue Code for more information.
(6)

Note that although the amOUIH is included in Box 1. no federal income tax withholding is required.

10

NATP TAXPROMonthly January 2009

Fonn W~2: Where to report reimbursements and benefits Applicable to greater-chan-2-percenr shareholders
Employ.;e Fringe Benefits Accident and Health 8enefi15 (See Foolnote J) Long-u:rm are premiums paid through ;a Clfcteti;a or flex spending ;accoum I.",ng-lerm are premiums nOl p:Lid through a afctcria or flex 5JXIlding accoum Non-Cuh Achin"cmcm Aw:uds Up to 51,600 from a qualified plan or 5400 from a non-qualifi~ plan
)~
,~

80"

BOll: 3 & 5

Box 10 801: 12 Cod, Bux 13 Box 14
00 00

""

ya

""
)~

"" ""
"" ""

"" "" "" "" "" "" "" "" "" "" "" "" "" "" ""
""
C

"" ""
optional

TlK aIDOllm O\'er S 1,GOO from a qll:l.JiflCd plan or 5400 from a non-qualified phn
Adoplion AS5i.Slance Paid from an adoption assistanec program Paid or reimbursed from a C:lfcleria plan Dcpendcnt C:lTe Assi.nance I'rogmJ11s
Ca.~h

,~

""

""

""
"" ""
'w ycs
ya ya

,~

l~

'" ya
"" ""
ya

"" ""
"" ""

reimbursemcnts up to limits of$5,000 MFJ or $2,250 MFS or Single

FMV of on-site facilities less 1he :Ull0lllH paid by employce lip 10 limilS of 55,000 MFJ or 52,250 IvlFS or Single
Amounr rdmburS«! or v::J.lue in excess of :lbovc Slated limits EduC:llionaltusistance Up to 55.250 paid from a qualified pb.n [() maimain or imprm'c job skills

""

""
ya
00

"" ""
oplional

Excess of 55.250 or p:lid from a l\On'<IUalifring plan bm consid/:rcd a working
condirion fringe benefit Paid as a working condition fringe benefit

Excess of 55.250 or p1id from a non-qllalifying plan and not considered
a ...."Orking condition fringe benefil Emplo}'u DiscountS Discoums nOl in excess ofzO percenl of ~rvicC5 Discoul1ls nOl in cxceu of {he cmploru's COSI DiscolllllS in excess of :lbove limits Group-Term Paid
10

"" ""
l~

"" "" ""
)~

"" ""
00

""
"" "" "" "" "" ""
l'a
r cs

""
""

"" "" "" "" "" ".
un

"" "" ""
""

"" "" ya
I)

"" "" ya
ya

urI.' 11I5urance Premiums (See FnOInOiC
10

"" "" "" ""
oplional oplional oplional

current and former employees up

S50,000 of COVCf:lge

ya ya ya

Paid 10 currem cmployees in cxcess of $50,000 of coverage up 10 FICA w~ge limil Heahh S:l\'ings Acwunts (HSAs) Moving Expense Reimbursements (Sec j:oo([lote 2) Paying as
;10

"" ""

".

w
I'

"" ""
"" "" ""

employee: Paid Of reimbum:d d~-duclible moving expenses
CXPCllSC:S

Paying as an emplo)'ee: Paid or reimbursed non-deductible moving

"" yO'
)~ )~

fa

""

"" "" ""

)~

Parillg as a panner: Paid or reimbursc:tl d~-dllctible moving expenses Paying:U:l parmer: P:lid or reimbursed non·doouclible moving exl)('nses Qllalified Transponauon 8enefiu Monthly limits applied to employees do nOI :lpply to grcuer-lhan.2'pcrcem shareholden

ra ya

""

". ""

""

""

"" "" ""

)U

)~

""

oplional

FOOU10les
(I)

ole lhal although lhc alllOUOl is included in Box I, no federal income

I:IX

wimholding is required.

{l) IRS Pub. I )-8 (Employer's Tax Guidc 10 Fringe Benefits) lim 2-pcrcelll sh:lreholdcrs as nOllemployecs for lhe moving expense rcimhur:selllcm exclusion. Howcver, lhe regulalions do [lOI define ~emplo)'ce~ for purposes of lhis exclusion. :lnd under § I 32(g). qualified moving expense reimbursemcnts can be rc<:cive<l by an)' individual, not illsr an elllployee. Therefore. il is nOl cOlircl)' clear if lhe IRS' position is correct.

January 2009 NATP TAXPRO Monthly

11

Tax Numbers Desk Guide

c===============
2009
(5(( NOTE DHOW)

2008

2007

2006

SINGLE -

RAI(S/T...llAOl( INCOME

, ". ,
15

"
MARRIED JOINT·

1- 8,350 8.)'>1- 33.950 33.951 - 82.250
~ 17t.5~

,. " ,
15 25

28
J3 JS

82.251

28
33 3S

,.
15

171,5:'1-372.950 Over l72.9SO
1 - 16.700 16.701-67.900 67.901- 1J7.0SO 1J7.OS I - 208.850

, ,

1-8,025 8.026 - n.550 n,Ss 1 - 78.8S0 78.851 - 16lI's50 1610.551- 3S7.700 Over 3S7.700

15 25

I. " ,

28
33 35

I.
15 25

RAI(S. fAUIU INCOME

"
MARRIEO SEPARATE'
R,UES/T"......OU INCOME

28
J3 JS

28
33 35

,.
IS

208.851 - 372,950 Over 372,950
1- 8.]'>0

1- 16.050 16,051-65,100 65,101-131..1.150 I3I..I.ISI- 200.300 200.301- 357.700 Over 357.700
I -8,02S 8.026 ~ n.5S0 n,S51 65.725 65.726-100.150 100.151-178.850 Over 178,8S0
I ~ 11.450 1l.llSI ~43.650 43.651 ~ 112.650 112.6SI ~ 182.400 182.401- 357.700 Over 357.700

,

1-7.825 7.826-31.850 31.851-77.100 77.101-160.850 160.851- 349.700 Over 349.700 1- IS.650 15,65 I - 63.700 63,701 -1280500 128.S01-195.850 195.851- 349,700 Over 349.700

15 25

I. ",

28
33 35

I.
15 2S

,

1 - 7.SS0 7,S51 - 30,6S0 30.651 - 74.100 74,201-154,800 154.801 - 336,5S0 aver 3J6.5S0

I.
15 2S

28
33 35

28

n
35

I.
15
2S

,

I.
15 2S

,

l-lS.loo 15.101-61,l00 61.301-123.700 123.701 - 188.'SO 188.'.Sl- 3J6.5SO Over 336.550

, ,

IS

" 28
J3

8.351 - JJ.9SO )).951 - 68.525
68.526 - I04,!.2') 10t..,426-186.475

28

28
33 35

3S
HEAD

or

HOUSEHOLD'

R"'I(S(TA,XABlE INCOME

I.

n
JS

,

Over 186,(,75
1-11.950

I.
15 25

,

,. ,

I ~ 7,825 7.826-31.850 31.851-64.2S0 610,251 - 97.925 97.926 - 174.850 Over 174.850

I.
15 2S

28

n

35

1-11.200
I UOI - 42.6S0

,. ,

1 -7.S50 7,S51 - 30,650 30,651-61,850 61,851-94,12S 94,226-168,27';0 Over 168.17S

" 28
J3 JS
12 MO. CAPITAL GAINS RATE STANDARD DEDUCTION

11,951-45500 45501-117.450
117.451-190,200

15 2S

28
33 35

28
33 35

190.201 - 372,950 Over 372.950
15%/0% 55,700 11,400 5,700 8,350 1,\00 1.400

42.651-110.100 110.101-178.350 178.3SI- 349,700 Over 349.700

15 25

28
33 35

1 - lo.no 10.751-41.0S0 41.0SI-106.000 106.001-171.650 171.651- 336550 Over ))6550 1S%/5'%. B,150 10,300 5.150 7.S50 1.000 USC

15%/0"10
5 S,4S0 10.900 S,4S0

15%/5%
5 S.350 10.700 S,)50 7.850 1.050 1,300 S3,1,00

Single
Joint relurns & surviving spouses

Mallied riling separately
Head of household

Additional for elderly 01 blind (married) Additional for elderly or blind (single) Taxpayer dependent of another
PERSONAL EXEMPTION (4)

8.0"
1,050

USO
SJ,SOO

'"
53.650

'"

'"

'"
53,300

FICA & SHf-EMPLOYMENT TAX Taxable wages for social security IMedicare MaximUIll socialsecurity/Medicare tax Social security/Medicare tax rate (employers and employees) Social security/Medicare tax rate (selr·employed)
SOCIAL SECURITY EARNINGS LIMIT lSI

Up 10 5106.800 1 All 56.6221 No limit

Up 10 5102,000 1 All 56.32/, 1 No limil

Up 10 597.500 1 All 56,04S 1 No limit

Up to 59/dOO 1 All 5S.840 1 No limil
6.20'%./1.4';0'"

6.20% 11.45% 12.4%/2.9'fo
514.160 No limit 55.000 1.000 Sl1,SOO 2.500 516.500 S,sOO 53.OOO,5S.9SO 51.000

6.20""'- 11.45% 12.4%12.9"10
513560 No limit 55.000 1.000 'J,IO.500 l.'iOO 5IS,SOO 5.000 51.9OO.5'i.800,5900

6.20% I 1.45%
12.4%/2.9""'512.960 No limit 54.000 '.000 510,500 2,500 515.500 '.000 52.850 55.650,5600

12.4'/2.9
512,480 No limit 54.000 1.000 510,000 2,500 51S.OOO 5.000

Under rull retirement age
Full retirement age
IRA CONTRIBUTION LIMIT

SO & over catch-up
SIMPLE DEf£llRAL LIMIT

SO & over catch-up 401(K) OEfERRAL LIMIT SO & over catch-up
HSA CONTRIBUTION LIMIT

•

Self only./Familyl Additional for 55 & older
(II

52,700 55.450 5700

G'~ilt~, 01

SSso. 01 S)OO plus ~iI,r>rd ''''OI'H'. noIlo rAcHd ,rguld, slJndJ:d drd..cliDn.
Of

"'" G,rillrt 01 S9oo.

S)OO plus tilrflfd

i"'_. noI to ~A1Hd ,tguldr slilndil,-rj drd"C1lOn.
DESK GUIDE. GUIDE FOllOWING

NOTE;

2009 TAX lEGISLATION MAY CHANGE NUMBERS ON THE fOR AN UPDATCD VCRS ION OF THE

"Gr~iIt... of SOSo. Of SJOO plus Nt~ Ittcomr. nollO rAlrffJ ,~gulil' slilltdil,d drd.,rb 1~,olOllttdl~,duil''''ho is d~ptnd~tt1 of ilnot"', ril.fU"IP'. I" Spffi.ll ,ul~ ilpplyin first yriltof ttl"rm~tt1
r6J

LEGISLATION, GO TD WWW.MOSTAD.COM/GUIDE09.PDF

2009
SECTION 179 DEOUCTION/PURCHASE LIMIT
KIDDIE TAX UNEARNED INCOME MAXIMUM

2008
$250.000 I 5800,000
51,800
$\.600

2007
5115,000 I 5500,000
51,700

2006
$108.000 I 5430,000
5\,700

S 13),000 I $530,000 (;,' 51.900
$1.700
$2,500

NANNY TAX THRESHOLD EDUCATION LOAN INTEREST DEDUCTION
EDUCATION SAVINGS ACCOUNT CONTRIBUTION

S1.500
$2.500

51.500
$2,500

$2.500

$2.000 $1,800
53.500,000

$2,000 $1,800
$2,000,000

52,000

52.000
$1.6$0

HOPE CREDIT LIMIT
ESTATE TAX EXEMPTION Top ESTATE TAX RATE
ANNUAL GIfT EXCLUSION

51.650 52.000,000 45% $12.000

$2.000.000
116%

45%

115%
$12.000

513,000

512.000
4l•.5c/17c

STANDARD MILEAGE RATE

Business/Depredation component

5,{ 12le
14~

IAN-lUll: SO.se
IUl·OEC:

I 21C 5BoSe I 21C

('8.se

fl9c
iI,(

Charitable activities
Medical/Moving expense TRANSPORTATION fRINGE BENEFIT LIMIT Vehicle transit pass/Qualified parking

\I'e
JM~-IUN:

2"~

19'

JUl-DlC:

'"

'"
5110/5215
5156,"00 - 178,900 13'.600 - 357,100 117,300-178,550 195,500- 318,000

'" '8<
5105 / $105

5110/5130

$115/$110

PHASE-OUT INCOMe') lEVELS FOR:
PERSONAL EXEMPTION Single Join1 returns & surviving spouses Married filing separately Head of household ITEMIZED DEDUCTIONS Single/Joint/Head of household Married filing separalely (HILD CREDIT Single/Heild of household Joint Married filing separately IRA DEDUCTIBILITY (with company pension) Single/Head of household Joint When spouse has company pension Married filing separately ROTH IRA ELIGIBILITY Single/Head of household Joint Married filing separalely Rollover of regular IRA to Roth IRAI8J (OllEGE BONO INTEREST EXClUSION Single/Head of household loint Married filing separately EOUCATION SAVINGS ACCOUNT (Eo. IRA) Single/Head of household/Married filing separalely Joinl HOPE/LifETIME LEARNING CREDITS Single/He<ld of household loint Married filing separately EOUCATION LOAN INTEREST OEDUCTION Single/He<Jd of household loint Married filing scpar<Jtely
'61 AmcunlS prt R('v, P'O(. Joo8·66. riJ~ m

$ 166,800 -189,300 250.200 - 372,700 125.100 - 186,350 208.500 - 33 1,000 $166,800 83,400 (51,000 per child) Stilrts ilt $75.000 StilftS at $110.000 Starts at $55,000

5159,950 139,950 119.975 199.950 -

282,450 362....50 181,225 322A50

S 150. 500 - 273,000
115,750 - 3"8.250 112,875-17".125 188.150 - 310.650 5150,500 75,250 (51,000 per child) Starts at 575.000 Starts at $110.000 Starts at 555.000

$159,950 79,975 ($\.000 per child) Stalts at 575.000 Stalls al $110,000 Stalls at 555,000

5156/.00 78.200 (51,000 per child) StJrts at $75.000 Starts at $110,000 Stalts al $5':>,000

\

55,000 - 65,000 89.000 - 109,000 166.000 - 176.000 0-10.000

\

53,000 - 63,000 85,000 - 105,000 159.000-169.000 0-10.000

\

52,000 - 62,000 83,000 - 103,000 156.000 - 166.000 0-10.000

S

50,000 ~ 60,000 75,000 - 85,000 150.000 - 160,000 O-to.ooo

5105,000 - 120,000 166,000 - 176,000 0-10,000 100,000

5101,000 - 116,000 159,000 - 169,000 o ~ 10,000 100.000

5 99,000 - 1tt•. OOO 156,000 - 166,000 0-10.000 100.000 5 65,600 - 80,600 98.400 - 128':.00 0

5 95,000 - 110,000 150,000 - 160,000 o -to,OOO 100,000 563.100-78,100 9(,,700-12".700 0

S 69.950 - 84,950 10/'.900 - 134,900 0

\

67,100-82,100 100.650 - 130.6':>0 0

5

95,OOO~ 110,000 190,000 - 220,000

5 95.000 - 110,000 190,000 - 220,000 5 (,8,000 - 58,000 96.000-116,000 0 5 55,000 -70,000 115.000 - 145,000 0

5 95,000 - 1l0,OOO 190.000 - 220,000 $ 47,000-57,000 9/1.000 - 11 (•.000 0

5 95,000 - 110,000 190,000 - 220,000 5 "5,000 ~ 55,000 90,000 -110,000 0

S

50,000 - 60,000 100,000 - 120,000 0

S 60,000 - 75,000 120.000 - 150,000 0

$

55.000 - 70.000 110,000 - 11.0,000 0

\

50.000 - 65,000 105,000 -135.000

0

I('Sis/JriOn li*i'lv ro inCtMS(' ,lmounts ro S250.0c0 S800,ooo. 8dSffl on ddjllsr"d Of modifiM adjus't>d S'USS in,um('.
Chl'b'l'IlSl't1.llll'.· Mllrkl'f;lIg SOIIlI;IIII.lji,rA('("(JII/(fall1.I··
67~-4ICi4'

IBt Nut 4110,,('d fOf ma"i('d filinS sepJrali'ly.

.\Iost:lll &

P.O. HU\

I7U~'

Oak lIarhur, \VA

~S277
, '1",(' WIJ</

Tull FI'l'l' I-SIlU-C154-16S4· (J60)

FAX (JC!U) 679-4167' \\\\\\.rnu,l:ltl.l·lIlli

Tax Numbers Desk Guide

or===============
2009
(5[[

NOTE BElOW)

SINGLE • RAI(S/lAll.jI,8lE INCOME

"
10 15
25

28
J3 35
MARRIED JOINT'
RATES/TAUBlE INCOME

1- 8.350 8.351- 3).950 33,951- 82,250 82,2S1- 171,5SO 171.5S1-J72.9SO Ovel l72.9SO 1 - 16,700 16,701-67,900 67,90I-137,OSO 137,051 - 2OB,8SO 208,851 - 372,9SO Over 372,9SO 1-8,3SO 8.351- JJ.9SO 33,951 - 68.525 68.526 - 10(,,42S 104,426 -186.475 Over 186.475 1-11.950 11.951-(,5.500 45.501- 117,450 117,451-190,200 190.201 - 372,950 Over 372,950 15%/0% 55,700 1l,400 5.700 8,350 1.100 1.400
OJ

,

" ,
10
IS

2008

2007

2006

10
IS 25

,

" " " ,
28 10
IS

1-8.025 8.026 - 32,550 32,551-78,850 78.851-164,550 164.551- 357.700 Over 357,700

" ,
10
IS

28

MARAIED SEPARATE'
RAUS/'A)(ASlE INCOME

" , "
10
IS

" " " ,
28 10
IS

1 - 16,050 16.0SI-6S,100 65,101-131,450 131,451- 200.300 200,30\ - 357.700 Over 357,700
I 8.025 8.026 32.5S0 32.551 65.725 65.726 - 100.150 100.151-178.850 Over 178.850 I 11.450 II,to5 I - 43,650 43.651 - 1\2.650 \ \ 2,651 - 182.tooo 182,401 - 357,700 Over 357.700

" " " ,
28 '0
IS

1-7.825 7,826-31,850 31.851-77.100 77.101-160.850 160,851- 349.700 Over 349.700 1-15.650 15,651-63.700 63,701- 128.500 128,501 - 195.850 195.851- 349.700 Over 349.700 1 - 7.825 7.826-31.850 31.8S\ - 64,250 64.251 - 97,925 97,926-174.850 Over 174.850

" ,
10
IS

" " " ,
28 10
IS

1-7,550 7.551-30,6S0 30.651-74,100 74.201-154,800 \54.801- 336.550 Over 336,S50

"

28

" " ,
10
IS

" " " ,
28 10
IS

l-IS.100 15,101 - 61,)00 61,301- \n.7oo 123.70\ - 188.450 188.451- 336.550 Over 336,SSO 1-7.SSO 7.s5 \ - 30.6SO 30.65\ -61.8S0 61.851-94.125 94.226 - 168.275 Over 168.275

"
HUD

"

28

35

or

HOUSEHOLD'

10
IS

,

" " "
" " "

28

25 28

25 28

10
IS

,

" " ,
10
IS

RAIES/TAJ.ABU IH(OMt

12 MO. CAPITAL GAINS RATE STANDARD DEDUCTION

" " "

28

28

15%/0% 55,450 10.900 5,1,50

" "

28
J3

\ -11.200 11.20\ -to2.650 42.651-110.\00 110.101-178.350 178.351- Jto9,700 Over 349.700 15%/5% 55,350 10,700 5,350 7.850 1.050 1.300 53,1'00

" " ,
10
IS

" "

28
35

1- 10)SO \0.75\ -41.0SO 41.051 - 106.000 106.001 - 171,650 171.65\ - 336.550 Over 336,550 15"10/5"10 55.150 10,300 5.1S0 7.550

Single Joint rClulns & surviving spouses Married filing separately

Head of household
Additional for elderly or blind (married) Additional fOf elderly or blind (single) Taxpayer dependent of another
PERSONAL EXEMPTION (~)

8.000
1.050 1,350
/.'!

1.000
1.250

53,650

'"

'"
53,)00

53.500

FICA & SELF-EMPLOYMENT TAX

TMable wages for social sl!(llrily!Medicare
Maximum social security/Medicare tax

Up to 5\06,800 / All 56,612 J No limit
6.10% 11.45% \2.4%/2.9%

Up to 5102,000 1 All 56,324 / No limit
6,20%

Up 10 597,500 / All 56,Ot'5 / No limit
6.20% 11.45% 12.4%12.9%

Up to $94,200 / All 55.840/ No limit
6.20~ 11.45"X

Social security/Medicare tax rate
(employers and employees)

J 1.45%

Social security/Medicare lax lale
(self·employed)
SOCIAL SECURITY EARNINGS LIMIT III

I 2A"to 1 2. 513.560

12,4"1oIVJ"'·

Under full ,eli,ement age Fulllelirement age
IRA CONTRIBUTION LIMIT

514.160

512.960

512,1.80

No limit
55.000

Nolimil
55.000

No limit
54.000

No limit
54,000

sO & sO &

over catch·up ovel calch·up

1.000
511.500 2.500 516.500 5.500 53,000 5S.9S0.51.000

1.000
510.500 2,500 515.500

1.000
510,500

1.000
510.000 2.500 5\5.000

SIMPLE O[((RRAL LIMIT

2.500
515.500

401{K) DEfERRAL LIMIT

sO & over catch·up
HSA CONTRIBUTION LIMIT Self onlvlFamilvl Additional for 55 & older
(/, G,r.lrrr Q/ $8jo. Dt $)00 plus III G,r.ltr, 01 s,oo. 01 S)ooplul
~.ImH
r~",rd ,rocomr,

'.000
\1.90015".800 5900

'.000
52.S50! 55.6S0, 5800
r.l>lP.l~'_

'.000
52.700 5S,4S0 5700

;rocoml'. nor 10 r~(r«J 'rgul.lt sr.Jnd.Jtd drdlJellOft IIOr ro rMr«J IrKl/l.lt sl.lnd,,,d drr!uclwn

r I. GtrJlr, of S9jo. 0' SJOO plus ~..,~ incOlTW. rIOt 10 r~(Hd tr$uU' Sl6rd6td dNlJeI_.

• "'0 lot md,.,.,dlJ"'who is d~p.rrliJrrtl of .Inar,,"
(I' 5prcIJI rulM 6pP/r;Il fitsr yr.,. cf rrl"r~'"

NorE: 1009 TAX ilGISLArlON MAY CNANGE NUMa£RS ON TNE DESK GUIDE. FOR AN UPDATED VERSION or THE GUIDE rDLLOWING ilGISLATlON. GO TO WWW.MOSTAD.COM/GUIDE09.PDr

2009
SECTION 179 OEDUCTION/PURCHASE LIMIT KIDDIE lAX UNEARNED INCOME MAXIMUM
NANNY TAX THRESHOLD EOUCATION LOAN INTEREST DEDUCTION EOUCATION SAVINGS A(COUNT CONTRIBUTION

2008
$250.000 I $800,000
$1.800 51,600
S2,SOO

2007
$125.000/5500,000
$1.700
$1500

2006
$108.000 I $4)0,000 $1.700

$133,000 I $530,000 (6)
51.900

51.700 $2,500 $2,000

51500
$2500
52.000 $1,6$0 52,000,000

52500
52.000

$2,000

HOPE CIlEDIT LIMIT
ESTATE TAX UEMPTION Top ESTATE TAX RATE ANNUAL GIrT EXCLUSION STANDARD MILEAGE RATE

$1,800 53.500.000

$1,800
$2.000.000

St.6S0

$2.000,000

$tJ.OOO

"'"
I f l'

$12.000
JAN·JUN: 50.5e Ille JUL·DEC: 58.S( /21e
14< JAN-JUN: 19c
)UL·QC(: 27c

"'"

.,'"
$12.000

$12.000

"'"
14<

Business/Depreciation component Charitable activities

55e/21e

4SS' !19(
14c

44.S'

Il7'
ISC

Medical/Moving: expense
TRANSPORTATION FRINGE BENEFIT LIMIT

2l"

lOc

Vehicle Iransit pass/Qualified parking PHASE-OUT INCOME(I) LEVELS FOR: PERSONAL EXEMPTION Single Joint returns & surviving spouses Married filing separately Head of household ITEMIZED DEDUCTIONS Single/loint/Head of household Married filing separately (HILO CREDIT Single/Head of household Joinl Married filing separately IRA DEDUCTIBILITY (with company pension) Single/Head of household Joint When spouse has company pension Married filing separately Rom IRA ELIGIBILITY Single/Head of household Joint Married filing separately Rollover of regular IRA to Roth IRA(8) (OllEGE BONO INTEREST EXCLUSION Single/Head of household Joint Married filing separately EDUCATION SAVINGS ACCOUHT (Eo. IRA) Single/Head of household/Married filing separately Joint HOPE/llrETIME LEARNING CREDITS Single/Head of household loin! Married filing separalely EDUCATION LOAN INTEREST DEDUCTION Single/Head of household Joint Married Ollng separately
(6) AmounlS pel Rev.

5120 I 5230

5115/5210

$110 I 5215

$105/$205

5166,800- 289,300 250.200 - 372,700 125.100-186,350 208.500 - 331,000 $166,800 83.400 (51,000 per child) Starts at 575,000 Starts at 5110,000 Starts at 555,000

5 I 59,950 - 282,450 239,950 - 362,450 119,975 -181,225 199,950 - 322,450 5159,950 79,975 (51.000 per child) Starts at 575.000 Starts at 5110.000 Starts at 555.000

5156,400 - 278.900 234.600 - 357.100 117.300-178,550 195,500-318,000 5156.400 78.200 (51.ooo per child) Starts at 575,000 Starts at 5110,000 Slarts al 555.000

$150.500 - 273,000 225,750 - 348,250 112,875 -174,125 188,150-310,650 5150,500 75,250 (51.000 per child) Starts at 575,000 Starts at 5110,000 Starts at 555.000

,

55,000 - 65,000 89,000-109,000 166,000 - 176,000 0- 10,000

,

53.000 - 63.000 85.000 - 105.000 159,000 -169.000 0-10,000

,

52,000 - 62.000 83,000-103,000 156,000- 166,000 0-10,000

,

50,000 - 60.000 75.000 - 85,000 150,000 - 160.000 0-10,000

S 105,000 - 120,000 166.000 - 176,000 0-10,000 100.000

5101.000 - 116,000 159.000-169,000 0-10,000 100,000

5 99,000 - 1V',OOO 156,000 - 166,000 0- 10,000 100,000

5 95.000 -110,000 150,000 - 160.000 0-10,000 100,000

,

69,950 - 84,950 104,900 - 134,900 0

,

67,100-82,100 100,650-130,650 0

S 65.600 - 80.600 98.400 - 128,400 0

S 63,100-78,100 94.700 -124,700 0

S 95.000 - 110.000 190,000 - 220,000

S 95,000 - 110.000 190.000-220.000 S 48.000 - 58,000 96.000-116.000 0

5 95,000-110.000 190,000 - 220.000 S 47,000-57,000 94,000 - 114,000 0

5 95.000 -110,000 190.000 - 220.000 5 45.000 - 55.000 90.000-110,000 0

, ,

50,000 - 60.000 100.000 -120,000 0

60.000 - 75.000 120.000 - 150,000 0

,

55,000 - 70,000 115,000 - 145,000 0

,

55,000-70.000 110,000 - 1/.0.000 0

,

50.000 - 65.000 105,000 - 135,000 0

"'a<:. 2008-66_

fa.<

lego'51",ioo iikely to ioc[C,lSe "mounls 10 $250.000 I S8oo,fJO{).

Il) g"sed on ,1di"$I~d Or modo'fied "djusled glD$S in(f)me. (8) Nul "Uowed fOl "'''flied filillg 5/'p"l"lely.

"Iuslad & ChriStenS('ll. Inc.• Murkl'lillK Slllur;tJlI.~fill" .-kcfJ/lllltmt,\ • P.O. 130:\ 17119· Oak I-Iarlwl'. \VA 9!:i277 Toll Fr('(' l·tWlJ·654-16:;;4· (J6/J) (,79-4164· FAX (3(0) 679-4167· \\\\\\.ll1usI:lII.CUIII

' \I.U·

~IJIJ'I


				
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Michael Baum Michael Baum Owner www.gobatch.net
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