Changes in Federal Income Tax Rate for
2009
The marginal tax rates are pegged to inflation
and numbers are annually revised. Thus you will
note that there are quite a few changes for the
2009 tax year compared to the year before. To
summarize, here are some of the more notable tax
rate changes for 2009 and even a quick blurb about
some of the key tax benefits that did not change
based on official IRS
releases thus far:
- Tax-bracket thresholds:
Tax-bracket thresholds increase for
each filing status. For a married couple filing
a joint return, for example, the taxable-income
threshold separating the 15-percent bracket from
the 25-percent bracket is $67,900, up from
$65,100 in 2008.
- Personal and dependency exemption:
The value of each personal and
dependency exemption, available to most
taxpayers, is $3,650 (up $150
from 2008).
- Standard deduction: The new
standard deduction is $11,400 for married
couples filing a joint return (up
$500), $5,700 for singles and married
individuals filing separately (up
$250) and $8,350 for heads of household
(up $350). Nearly two out of
three taxpayers take the standard deduction,
rather than itemizing deductions, such as mortgage interest,
charitable contributions and state and local
taxes.
- Earned income tax credit:
The maximum earned income tax credit
for low and moderate income workers and working
families with two or more children is $5,028, up
from $4,824 (up $204). The
income limit for the credit for joint return
filers with two or more children is $43,415, up
from $41,646 (up $1,769).
- Gift exclusion: The annual
gift exclusion rises to $13,000, up from $12,000
in 2008 (up $1,000).
- Social Security Contribution and
Wage Benefit Base: Increased to
$106,800 from $102,000 (up
$4,800). Income over $106,800 will not
be subject to Social Security taxation, and at
the current Social Security tax rate of 6.20%,
the maximum Social Security taxes for 2009 is
$6,621.60.
- Traditional
and Roth IRA Contribution
Limits: No change from
2008. The Traditional
IRA and Roth
IRA contribution
limits will be staying
the same at $5,000 per year for those under age
50, and $6,000 per year for those 50 or above.
Although the information in this article helps
summarize the changes in Federal Income Tax, you
should consult the official IRS.gov web site and
a professional tax advisor as needed.
Tax Rate Schedules for
Individuals and Trusts--2009
Single Taxpayers--2009
Taxable income: Tax:
Over But not over Tax +% On amount over
$ 0 $ 8,350 $ 0.00 10 $ 0
8,350 33,950 835.00 15 8,350
33,950 82,250 4,675.00 25 33,950
82,250 171,550 16,750.00 28 82,250
171,550 372,950 41,754.00 33 171,550
372,950 ....... 108,216.00 35 372,950
Married Individuals Filing Joint and Surviving
Spouses--2009
Taxable income: Tax:
Over But not over Tax +% On amount over
$ 0 $ 16,700 $ 0.00 10 $ 0
16,700 67,900 1,670.00 15 16,700
67,900 137,050 9,350.00 25 67,900
137,050 208,850 26,637.50 28 137,050
208,850 372,950 46,741.50 33 208,850
372,950 ....... 100,894.50 35 372,950
Married Individuals Filing
Separate--2009
Taxable income: Tax:
Over But not over Tax +% On amount over
$ 0 $ 8,350 $ 0.00 10 $ 0
8,350 33,950 835.00 15 8,350
33,950 68,525 4,675.00 25 33,950
68,525 104,425 13,318.75 28 68,525
104,425 186,475 23,370.75 33 104,425
186,475 ....... 50,447.25 35 186,475
Heads Of Households--2009
Taxable income: Tax:
Over But not over Tax +% On amount over
$ 0 $ 11,950 $ 0.00 10 $ 0
11,950 45,500 1,195.00 15 11,950
45,500 117,450 6,227.50 25 45,500
117,450 190,200 24,215.00 28 117,450
190,200 372,950 44,585.00 33 190,200
372,950 ....... 104,892.50 35 372,950
Estates And Trusts--2009
Taxable income: Tax:
Over But not over Tax +% On amount over
$ 0 $2,300 0.00 15 $ 0
2,300 5,350 $ 345.00 25 2,300
5,350 8,200 1,107.50 28 5,350
8,200 11,150 1,905.50 33 8,200
11,150 ..... 2,879.00 35 11,150
Long-Term Capital Gains and Qualifying
Dividends--2009
For taxpayers in the
10% or 15% bracket--0%
For taxpayers in higher brackets--15%
Tax on unrecaptured Sec. 1250 gain--25%
Capital gain rate on collectibles--28%
Standard Deduction--2009
Filing Status Standard Deduction
Married filing joint and
surviving spouses $11,400
Heads of Household 8,350
Single individuals 5,700
Married, filing separate 5,700
Dependent's
Standard Deduction--No more than the greater of
$950 or $300 plus the individual's earned income.
Additional standard deduction for aged and
blind--$1,100 each ($1,400 if individual is
unmarried and not surviving spouse)
Additional standard deduction for real estate
taxes--$500 max. ($1,000 if married filing joint)
if not itemizing.
Additional standard deduction for casualty
losses in federally declared disaster
area.
Itemized Deduction Phaseout--2009
All filing status but
married separate--$166,800; Married,
separate--$83,400
Personal Exemption--2009
Amount--$3,650
Phaseout of Personal Exemption-- Filing Status AGI Begin Phaseout AGI Maximum Phaseout
Married, filing joint/surviving spouse $250,200 $372,700
Heads of household 208,500 331,000
Single 166,800 289,300
Married, filing separate 125,100 186,350
For taxable years
beginning in 2009 the exemption amount for
taxpayers with AGI in excess of the maximum
phaseout amount is $2,433.
Alternative Minimum Tax--2009
First $175,000 ($87,500 married, separate) of Alternative Minimum Taxable Income 26%
Over $175,000 of AMTI (Alternative Minimum Taxable Income) 28%
Exemptions:
Joint Filers $70,950
Married, separate $35,475
Single (and head of household) $46,700
Estates & Trusts $22,500
Child subject to Kiddie Tax $6,700 (plus child's earned income)
Exemption Phaseout:
25% of amount AMTI exceeds:
$150,000 for married, joint and surviving spouses
$112,500 single (and head of household)
$75,000 married, filing separate
Hope and Lifetime Learning
Credits--2009
Phaseout begins at
modified adjusted gross income of $100,000 joint
return; $50,000 all others.
Hope credit, 100% of first $1,200; 50% of next
$1,200; maximum credit $1,800.
Interest on Education Loans--2009
Maximum interest
deduction--$2,500
Modified adjusted gross income phaseout
range--Married, joint, $120,000--$150,000; all
other filing status, $60,000--$75,000
Savings Bond/Higher Education Expense
Exclusion--2009
Modified adjusted
gross income phaseout--married, joint,
$104,900--$134,900; all other filing status,
$69,950--$84,950
Qualified Transportation Fringe Benefit
Exclusion--2009
Commuter highway
vehicle and transit pass--$120
Qualified parking--$230
<
Earned Income Tax Credit
(EITC)--2009
Number of Qualifying Children
Item One Two or More None
Earned Income Amount $ 8,950 $12,750 $ 5,970
Maximum Amount of Credit 3,043 5,028 457
Threshold Phaseout (single, surviving
spouse or head of household) 16,240 16,420 7,470
Completed Phaseout (single, surviving
spouse or head of household) 35,463 40,295 13,440
Threshold Phaseout (married, joint) 19,540 19,540 10,590
Completed Phaseout (married, joint) 38,583 43,415 16,560
Excessive
Investment Income for Earned Income Tax
Credit--$3,100
Miscellaneous--2009
Annual Exclusion for
Gifts--$13,000
Annual Exclusion for Gifts to Spouse not a
Citizen--$133,000
Notice of Large Gifts Received from Foreign
Persons--$14,139
Interest on Certain Portion of Estate Tax
Payable in Installments (Sec. 6166; 2%
portion)--$1,330,000
Valuation of Qualified Real Property in
Decendent's Gross Estate (Sec. 2032A)--$1,000,000
Unearned Income of Minor Child (Kiddie
Tax)--$950 ($9,500 for parental election)
Foreign Earned Income Exclusion--$91,400
Minor Child subject to Kiddie Tax--up to age 18
or full-time student over 18 with earned income no
more than 1/2 support under age 24.
Adoption Expenses--2009
Maximum credit for
child with special needs--$12,150
Maximum credit, other adoptions--$12,150
Other adoptions, gross income exclusion,
qualified expenses up to $12,150
Phaseout range, modified adjusted gross
income--$182,180 to $222,180
Persons Against Which a Federal Tax Lien is
Not Valid--2009
Purchasers in a casual
sale for less than $1,380 or a mechanic's lienor
that repair or improved certain residential
property if the contract price is not more than
$6,880.
Eligible Long-Term Care
Premiums--2009
Attained Age Before the Close of the Tax Year Limitation on Premiums
40 or less $ 320
More than 40 but not more than 50 600
More than 50 but not more than 60 1,190
More than 60 but not more than 70 3,180
More than 70 3,980
Social Security--2009
OASDI Wage
Base--$106,800
Household employee cash wages threshold--$1,700
Quarter of coverage--$1,090
Health Savings Accounts--2009
Maximum annual HSA
contributions deductible--$3,000 for individual;
$5,950 for family coverage
Catch-up contributions for individuals 55 or
older (but less than 65) is $1,000 (pro rate for
year).
Deductible Amounts that define High Deductible
Plan:
Annual Deductible Deductibles, Co-Payments and other Amounts
Not Less Than but not Premiums Not to Exceed
Self Only $1,150 $ 5,800
Family Coverage 2,300 11,600
|