Important Tax Law Changes for 2010

| | Comments (0) | TrackBacks (0)

Important Tax Law Changes for 2010

·         Due date to file is April 18, 2011

·         Health Care Professionals who received canceled debt notices for education loan repayment or forgiveness programs will not need to include that canceled debt as income if due to programs intended to increase availability of health care services in underserved areas or health professional shortage areas. To learn if you are eligible consult your loan program office. This change is part of the Affordable Care Act of 2010 and is retroactive to 2009. You will need to file a form 1040X if in 2009 your canceled debt is now considered an eligible loan repayment or forgiveness.

·         $1,900 is the limit of taxable investment income children can have without it being subject to the parent's tax rate.

·         For households who do not have enough expenses to itemize their deductions, the following are standard-deduction amounts based on IRS defined filing status:

o   $11,400 Married Filing Jointly or Qualifying Widow(er)

o   $8,400 Head of Household

o   $5,700 Single or Married Filing Separately

·         Personal and Dependent Exemptions remain at $3,650 each.

·         Making work pay credit of up to $400 again available this year. Certain households who did not receive the $250 economic recovery payment in 2009 but got it in 2010 will reduce their Making Work Pay Credit by that amount.

·         Earned Income Tax Credit - Maximum income amounts and credit available

o   $13,460 ($18,470 MFJ- Married Filing Jointly) no qualifying child - credit $457

o   $35,535 ($40,545 MFJ) one qualifying child - credit $3,050

o   $40,363 ($45,373MFJ) two qualifying children - credit $5,036

o   $43,352 ($48,362MFJ) three or more qualifying children - credit $5,666

·         2010 is the last year employees could opt to receive up to $1,830 of their earned income tax credit with their paychecks. The IRS is dropping this program because so few workers used it.

·         Additional Child Tax Credit - eligible households could receive this refundable credit if they earned at least $3,000 and had an eligible child.

·         In addition to splitting your refund into up to three separate accounts, you can also purchase up to three U.S. Series I Savings Bonds and receive the balance of your refund as a check or direct deposit to a bank account.

·         Medicare Part D recipients who received a $250 rebate to assist with the "donut hole" drug plan coverage gap do not need to report this income nor pay taxes on it.

·         Standard Mileage Rates:

o   Business Related mileage 50 cents/mile

o   Medical/Moving related mileage 16.5 cents/mile

o   Charitable purposes mileage is 14 cents/mile

·         First Time Homebuyer Credit

o   If you took advantage of the credit in 2008 you must begin the 15 year repayment of that credit

o   For first time homebuyer's in 2010 to qualify for the credit of 10% of the purchase price up to an $8,000 credit, you had to meet the September 30, 2010 settlement deadline. This refundable credit will not require repayment.

·         Up to $13,170 in adoption qualified expenses can be claimed toward the Adoption Tax Credit which is part of the Affordable Care Act of 2010.

·         All unemployment compensation received in 2010 is subject to taxation. For 2009 up to $2,400 could have been excluded from income.

Next month I'll share information about the recently passed tax legislation included in the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010.

 

 

0 TrackBacks

Listed below are links to blogs that reference this entry: Important Tax Law Changes for 2010.

TrackBack URL for this entry: https://blogs.psu.edu/mt4/mt-tb.cgi/217681

Leave a comment

February 2011

Sun Mon Tue Wed Thu Fri Sat
    1 2 3 4 5
6 7 8 9 10 11 12
13 14 15 16 17 18 19
20 21 22 23 24 25 26
27 28          

Recent Comments

Archives

Pages