Tax Law Changes for the 2009 Tax Year
Friday, January 16, 2009 9:08 - By The DavidOn January 1, some new tax laws took effect for the 2009 tax year. It’s worth noting that they won’t affect the tax returns you’ll be filing soon, but could impact your finances in 2009. Try to keep these in mind as you plan for the upcoming year.
Here are some of the changes that could impact you:
- 401K contributions
- Limit raised to $16,500 (up from $15,500)
- Standard deductions
- Raised to $11,400 for couples (up from $10,900), and $5,700 for singles (up from $5,450)
- Social Security taxes
- The amount of income subject to SS tax rose to $106,800 (up from $102,000)
- Mileage rates
- Did you use your car for work? Reimbursement rates dropped to $.55 a mile
- Did you use your car to move or for medical purposes? Rates dropped to $.27 a mile
- Casualty and Theft deductions
- You can deduct losses from casualty and theft, but only after paying a $500 deductible. This is up significantly from 2008, when it was $100.
The most important change is the increase in 401K contributions limits. If you maxed out your 401K in 2008, make sure to increase your contributions to take advantage of it.
Changes were also made to areas like estate taxes, minimum retirement distributions, nanny taxes, stealth taxes, and employees working overseas, but I’m not going to go into those here as they won’t affect most readers.
For a complete list of the changes, please see the Wall Street Journal.
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William@buyincometaxsoftware
