2009 is right around the corner. Even though you’ll be spending the first few months of ’09 figuring out your 2008 taxes, make sure you know what’s going on for taxes in 2009.
1. Roth IRAs: Income caps for high-income earners rise in 2009. If your Adjusted Gross Income is in the six digits, this effects you. The pay in limit for Roths increases for singles from $105,000 to $120,000, and for couples from $166,000 to $176,000.
2. Estate tax leaps to $3.5 million, up from $2 million in 2008.
3. Annual gift tax exclusion will rise to $13k per donee, up from $1,000.
4. The standard mileage rate for business driving is 55¢ a mile for 2009…a drop of 3½¢ per mile from the rate in effect for the final six months of 2008. For medical travel and moving its 24¢ per mile. When driving for charity its 14¢ a mile.
5. Standard deductions rise in 2009. Married couples can claim $11,400. If one spouse is 65 or older, $12,500. If both are, $13,600. Single taxpayers get $5,700. Those 65 and older can take $7,100. Household heads get $8,350 plus $1,400 once they reach age 65. Taxpayers who are legally blind are allowed to add $1,100 to these amounts. Also, married tax filers who do not itemize can augment their standard deduction by up to $1,000 of property taxes paid. Singles filers can add in up to $500 of taxes paid.
6. If you are 70½ or older you can skip minimum required payouts from retirement plans and IRAs for 2009 without a penalty.
7. In 2009 the maximum 401(k) contribution increases to $16,500, up by $1,000.Individuals born before 1960 can contribute an extra $5,500, for a total of $22,000.
8. Contribution payin limit for defined contribution plans such as SEP IRA accounts and Keogh plans increases to $49,000.
9. Personal exemptions are $3,650 for each filer and their dependents.
10. Annual caps on deductible contribution payins to health savings accounts rise in 2009. The maximums increase to $5,950 for account holders with family coverage and as much as $3,000 for single coverage.
What isn’t changing…
Contribution limits for IRAs and Roth IRAs. They’re still $5,000 a year, plus $1,000 more for anyone born before 1959.