What's New for 2010
All tax cuts enacted under the Bush administration that would have expired at the end of 2009 have been extended for one or two years.
Tax brackets remain virtually unchanged. The exemption amount stays at $3,650. The standard deduction is paused at $11,400 for joint filers and $5,700 for single filers. Heads of household receive a small increase in the standard deduciton to $8,400 for 2010.
Seniors age 65 and over can write off $1,100 from taxable income. Take off another $1,100 each if blind and a widow(er).
The maximum IRA contribution is $5,000 for another year, with a $1,000 catch-up provision for filers age 50 and older. Make contributions for tax year 2010 by April 15, 2011.
The minimum distribution from an IRA must commence at age 70½, a requirement that was waived in 2009.
All unemployment insurance is federally taxable. The $2,400 exclusion for 2009 was repealed.
The standard mileage rate is down to 50 cents and tax credits for fuel efficient vehicles purchased in 2010 are up. Visit the Web site www.fueleconomy.gov for a complete listing.
Taking a residential energy credit? The product must be “placed in service” by December 31, 2010. Installation costs of doors, windows, skylights and insulation are not included, but are included for furnaces, roofs, solar panels, HVAC and other home enhancements. Make sure the product qualifies by checking the manufacturer's certification against the required specifications detailed at www.energystar.gov.
Earned income credit is higher than ever. As last year, up to three children may qualify for the credit.
Those who claimed a first-time homebuyer credit during 2008 will pay back their credits in installments starting this year and ending 2024. The credit must be repaid in full when the primary residence is sold or converted to a rental property.
Tax brackets remain virtually unchanged. The exemption amount stays at $3,650. The standard deduction is paused at $11,400 for joint filers and $5,700 for single filers. Heads of household receive a small increase in the standard deduciton to $8,400 for 2010.
Seniors age 65 and over can write off $1,100 from taxable income. Take off another $1,100 each if blind and a widow(er).
The maximum IRA contribution is $5,000 for another year, with a $1,000 catch-up provision for filers age 50 and older. Make contributions for tax year 2010 by April 15, 2011.
The minimum distribution from an IRA must commence at age 70½, a requirement that was waived in 2009.
All unemployment insurance is federally taxable. The $2,400 exclusion for 2009 was repealed.
The standard mileage rate is down to 50 cents and tax credits for fuel efficient vehicles purchased in 2010 are up. Visit the Web site www.fueleconomy.gov for a complete listing.
Taking a residential energy credit? The product must be “placed in service” by December 31, 2010. Installation costs of doors, windows, skylights and insulation are not included, but are included for furnaces, roofs, solar panels, HVAC and other home enhancements. Make sure the product qualifies by checking the manufacturer's certification against the required specifications detailed at www.energystar.gov.
Earned income credit is higher than ever. As last year, up to three children may qualify for the credit.
Those who claimed a first-time homebuyer credit during 2008 will pay back their credits in installments starting this year and ending 2024. The credit must be repaid in full when the primary residence is sold or converted to a rental property.
Read more highlights of the 2010 federal income tax code at the official IRS Web site.
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