By now the W-2s and 1099s have arrived via mail.
But before you file taxes, be aware of tax changes.
This is the Internal Revenue Service’s top five tax changes for 2009.
1. The American Recovery and Reinvestment Act of 2009
ARRA has several tax provisions that affect individual tax returns, which are due April 15. ARRA provides tax incentives for first-time homebuyers, people who purchased cars, those who made their homes more energy efficient, parents and students paying for college, and people who received unemployment compensation.
2. Individual Retirement Account deduction expanded
If you were covered by a retirement plan and your modified adjusted gross income is less than $65,000 (or $109,000 if married and filing a joint return), then you may be able to take an IRA deduction.
3. Standard deduction increased for most taxpayers
The 2009 basic standard deductions were increased. They are: $11,400 for married couples filing a joint return and qualifying widows and widowers; $5,700 for singles and married individuals filing separate returns; and $8,350 for heads of household.
And based on local or state sales or excise taxes paid on the purchase of most new motor vehicles – purchased after Feb. 16, 2009 – taxpayers may claim an additional standard deduction. And you may increase your standard deduction by the amount of state or local real estate taxes paid during the year or net disaster losses suffered from a federally declared disaster.
4. Standard mileage rates
Mileage rates changed for 2009. The standard rate for business use of a vehicle is 55 cents per mile, and the standard rate for the cost of operating a vehicle for medical reasons, or a deductible move, is 24 cents per mile.
5. Child tax change
The amount of taxable investment income a child can have without it being subject to tax at the parents’ rate has increased to $1,900.
For more information about tax changes, visit www.IRS.gov.