What's New for This Year Income Tax?

What’s new for 2009 income tax from A to Z? There are many changes for 2009 income tax return filling. Following are the items and the new forms they will be reported on:

Additional child tax credit is is increased for some people and for some married couples who fill joint return. It must be filled on Form 8812.

Alternative minimum tax (AMT) exemption amount increased to $46,700 ($70,950 for married couple fill joint return or qualifying widow(er) and $35,475 for married person who fills separately.

American opportunity credit is the Hope education credit that has been increased to $2500.

Cash for clunkers voucher from the “cash for clunkers” program is not taxable for Federal income tax.

Credit for child and dependent care will be reported on Form 2441.

Credit for the elderly or disabled will be reported on Schedule R on Forms 1040A and 1040.

Deduction for motor vehicle sales taxes is deductible on line 24a, Schedule L and it was bought after February 16, 2009.

Earn income credit (EIC) has been increased for people with three or more children and married couples who fill joint return.

Economic recovery payment is not taxable for Federal income tax, but it reduces making work pay credit or government retiree credit.

Government retiree credit can be deducted if you get a government pension or annuity, but it will reduce any making work pay credit.

IRA (Individual Retirement Arrangement) deduction may be deducted if you are covered by a retirement plan and modified adjusted gross income (AGI) is less than $65,000 ($109,000 for married couple fill joint return or qualified widow(er). If only one spouse is covered by a retirement plan, you may make IRA deduction if your AGI less than $176,000.

Making work pay credit may be taken at 6.2% of your earn income for this credit. However, it is up to $400 person and $800 for married joined filling.

Standard deduction increased for certain people. Use Schedule L if you have real estate taxes, new motor vehicle sales tax, or net disaster loss (Form 1040).

Taxable interest and qualified dividends are now will be reported on Schedule B for both Forms 1040A and 1040.

Unemployment compensation is not taxed for the first $2,400 per recipient. However, the amount more than $2400 will be taxed.

Disclaimer: This tax information is found in the IRS publication, provided as a public service, and cannot guarantee the accuracy of the information provided.