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| 2009
TAX YEAR CHANGES |
Beginning January 1, 2009, investors have
more opportunities to save for their retirement and for
a child's education due to recent legislative changes. Here
are some highlights, however are subject to change due to
ongoing legislative actions:
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| Traditional IRAs and Roth IRAs |
- Contributions to Traditional IRA and Roth IRA
remains at $5,000 for 2009, and "catch-up" for investors
age 50 and over remains at $1,000; so those over 50 can contribute
$6,000.
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| 401(k)s and 403(b)s |
- 401k and 403b contributions increase
to $16,500, and catch-up for investors age 50 and over
increases to $5,500. In 2009, those over 50 can
contribute $22,000.
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| SEP Plans |
- Contributions to a SEP Plan increases to
$49,000 (46,000) for 2009.
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| SIMPLE Plans |
- Contributions to a SIMPLE Plan increases to
$11,500 (10,500). Catch-up provisions for investors age 50 and over
remains at $2,500. In 2009, those over 50 can
contribute $14,000.
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| HSAs
Accounts |
- Health savings
accounts (HSAs) allow taxpayers with high-deductible
health insurance to set aside pretax dollars that can be
withdrawn tax-free for medical expenses.
- 2009 Contribution limits
are $3,000 (Single) and $5,950 (Family). Additional
contributions of $1,000 for 55 & older.
- You can make contributions
to your Health Savings Account for 2009 until April 15,
2010.
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| Education
IRAs (Coverdell Education Savings Accounts) |
- The maximum annual pre-tax contribution
remains at $2,000.
- Savings may be used for primary and secondary school
expenses, in addition to higher education fees.
- The income eligibility limits increased for joint
filers. The phase-out range is $190,000-$220,000.
- Contribution deadline for
2009 is April 15, 2010.
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| Miscellaneous Changes |
- Standard Mileage Allowance:
- Business - $.55 per mile.
- Medical/Moving - $.24
per mile.
- Charitable activities
- $.14 per mile.
- Self-employment Health
Insurance Deduction - 100%.
- Section 179 Deduction -
$250,000 (SUV 25,000)
- Purchase limit -
$800,000.
- Top Estate Tax Rate - 45%.
- Estate Tax Exemption -
$3,500,000.
- Nanny tax threshold -
$1,700.
- Prior-year safe harbor for
estimated taxes of higher-income individuals remains at 110% of prior year's tax liability.
However, qualified business owner's safe harbor reduces to
the lesser of 1) 90% of 2008 tax liability or 2) 90% of 2009
tax liability.
- First-Time Homebuyer
credit increases to $8,000 ($4,000 MFS) for qualified
individuals for purchases between 1/1/09-11/30/09.
- Tax brackets, personal
exemptions, and many other tax numbers increase due to
required annual inflation adjustments.
- These are just a few of
the many tax law changes, please contact us for other items.
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