The standard business automobile mileage rate deduction for 2009 is 55 cents
per mile.  The 2009 rate per mile for charitable services is 14 cents per mile. 
The medical per mile rate is 24 cents per mile.

Medical expenses including health insurance are deductible as itemized deductions
only to the extent that they exceed 7.5% of your adjusted gross income.

Social Security recipients with a modified income over $34,000 for singles,
or $44,000 for married couples, will have 85% of their benefits taxed. 
Lower modified income will result in either 50% or 0% benefits taxed.

Individual Retirement Accounts limits are $5000 for 2009. Individuals age 50
as of 12/31/09 can make additional catch up contribution of $1000. You have
until April 15, 2010 to make your contribution. There are no income limits for contributions to a Traditional IRA, but deductible limits and thresholds apply. 
You must have earned income to contribute. 

Health insurance premiums for the self-employed are 100% deductible. 

For 2009, the “kiddie tax” applies to unearned income in excess of $1,900 for children.

Alternative motor vehicle credits are available, based on models.

There is a $1,000 child tax credit for your dependent child under 17.  The credit
is reduced for married taxpayers with AGI over $110,000.

The maximum tax rate on net long-term (assets held for more than one year) capital gains is 15%. For taxpayers in the 10% and 15% brackets, the rate is 0%.   A 25%
rate applies to real estate depreciation recapture and a 28% rate applies to
collectibles held more than one year.

Education credits:  American Opportunity and Lifetime Learning credits are available
for expenses paid for post-secondary education.  The maximum American Opportunity credit is $2,500 for all 4 years of college. The maximum Lifetime Learning credit is $2,000 for an unlimited number of years.  Both credits phase out for single taxpayers with AGI of $50,000 to $60,000 and joint taxpayers with AGI of $100,000 to $120,000.

Qualifying individuals may claim an above-the-line deduction for up to $2,500 of
interest paid on a qualified higher education loan with an income phaseout.

Social Security wage base for 2010 is $106,800.

Add-on to the standard deduction for real estate taxes. Up to $500 for single
taxpayers and $1,000 for joint filers. Sales tax on new vehicle purchases may
increase standard deduction.

The 2009 tax rates are as follows:

	Single	Married-Joint
10%	$          0 - $   8,350	$        0 - $ 16,700
15%	8,350 -    33,950	16,700 -    67,900
25%	33,950 -    82,250	67,900 -  137,050
28%	82,250 -  171,550	137,050 -  208,850
33%	171,550 -  372,950	208,850 -  372,950
35%	Over 372,950	Over 372,950

  

The business meal and entertainment expense deduction is 50% of otherwise
allowable costs.  Also, the deduction for club dues is non-deductible for
entertainment activities.  Professional and service organization dues are
deductible.

Social Security earnings limit for 2009 under age 65 is $14,160.  Once an
employee reaches full retirement age, benefits are not reduced, regardless of
earnings.

Above the line education deduction up to $4,000 with an income phaseout.

529 college savings plans provide tax-advantaged savings.

Dividends paid by most corporations are taxable as long-term capital gains.  The
new 15% or 0% capital gain rate applies to qualified dividends received at any time
in 2009.

Charitable contributions of cash must have receipts. Noncash donations of $250 require written acknowledgement from the organization.

Unemployment benefits of $2,400 are excludable from income.

First time homebuyer 10% credit of purchases price, up to $8,000. Income
phase out and recapture apply.

Making Work Pay credit is 6.2% of earned income up to a maximum of $400
($800 for couples filing jointly) with income phase out.

Click here to see Prior Tax Tips for 2008
Click here to see Prior Tax Tips for 2007