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Important New Tax Changes
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2009
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2010
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Dividends - Maximum Tax Rate
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15%
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15%
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Capital Gains - Maximum Tax Rate
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15%
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15%
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Child Tax Credit (Subject to phase out for higher incomes)
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$1,000
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$1,000
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Maximum Section 179 Deduction
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$250,000
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$250,000
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Bonus Depreciation for New Qualified Property
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50%
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0%
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Retirement Provisions
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2009
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2010
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Maximum annual 401(k) or 403(b) salary-deferred limit
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$16,500/22,000 (2)
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$16,500/22,000 (2)
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Maximum annual pension under defined benefit plan
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$195,000
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$195,000
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Maximum annual additions limit under defined contribution plan
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$49,000
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$49,000
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Maximum includible compensation for computing contributions
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$245,000
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$245,000
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Maximum SIMPLE salary-deferred limit
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$11,500/$14,000 (2)
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$11,500/$14,000 (2)
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Minimum annual compensation for determining a “highly compensated
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$110,000
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$110,000
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employee" (used in 401(k) nondiscrimination tests)
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Minimum annual compensation amount for SEP participation
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$550
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$550
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Standard Deductions
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2009
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2010
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Joint or qualifying widow
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$11,400
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$11,400
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Single
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$5,700
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$5,700
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Head of household
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$8,350
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$8,400
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Married filing separately
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$5,700
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$5,700
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Additional for elderly or blind (married)
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$1,100
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$1,100
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Additional for elderly or blind (unmarried)
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$1,400
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$1,400
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Taxpayer claimed as dependent (1)
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$950
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$950
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Personal/Dependent Exemption
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$3,650
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$3,650
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Unearned income without kiddie tax
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$1,900
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$1,900
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Beginning of 15% Income Tax Bracket
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2009
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2010
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Joint or qualifying widow
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$16,700
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$16,750
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Single
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$8,350
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$8,375
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Head of household
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$11,950
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$11,950
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Married filing separately
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$8,350
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$8,375
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Estates and nongrantor trusts
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$0
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$0
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Beginning of 25% Income Tax Bracket
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2009
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2010
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Joint or qualifying widow
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$67,900
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$68,000
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Single
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$33,950
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$34,000
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Head of household
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$45,500
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$45,550
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Married filing separately
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$33,950
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$34,000
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Estates and nongrantor trusts
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$2,300
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$2,300
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Beginning of 28% Income Tax Bracket
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2009
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2010
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Joint or qualifying widow
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$137,050
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$137,300
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Single
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$82,250
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$82,400
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Head of household
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$117,450
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$117,650
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Married filing separately
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$68,525
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$68,650
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Estates and nongrantor trusts
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$5,350
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$5,350
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Beginning of 33% Income Tax Bracket
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2009
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2010
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Joint or qualifying widow
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$208,850
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$209,250
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Single
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$171,550
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$171,850
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Head of household
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$190,200
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$190,550
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Married filing separately
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$104,425
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$104,625
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Estates and nongrantor trusts
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$8,200
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$8,200
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Beginning of 35% Income Tax Bracket
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2009
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2010
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Joint, Single, Head of household
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$372,950
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$373,650
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Married filing separately
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$186,475
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$186,825
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Estates and nongrantor trusts
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$11,150
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$11,200
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FICA/SE Tax Information
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2009
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2010
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FICA tax rate (including Medicare)
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7.65%
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7.65%
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SE tax rate (including Medicare)
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15.30%
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15.30%
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Maximum earnings subject to full rate
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$106,800
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$106,800
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Medicare rate applicable to all earnings over limit:
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2009
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2010
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Employee Medicare
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1.45%
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1.45%
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Self-employed Medicare
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2.90%
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2.90%
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Beginning/Ending of Personal Exemption Phaseout Range
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2009
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2010
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Based on AGI
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Joint or qualifying widow
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$250,200/372,700
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N/A (3)
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Single
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$166,800/289,300
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N/A (3)
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Head of household
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$208,500/331,000
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N/A (3)
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Married filing separately
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$125,100/186,350
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N/A (3)
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Beginning/Ending of Itemized Deduction Phaseout Range
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2009
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2010
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Based on AGI
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Joint, Single, Head of household
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$166,800
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N/A (3)
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Married filing separately
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$83,400
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N/A (3)
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Beginning/Ending of U.S. Savings Bond Interest Income
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2009
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2010
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(Used for Higher Education) - Exclusion Based on Modified AGI
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Joint return
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$104,900/134,900
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$105,100/135,100
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Unmarried
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$69,950/84,950
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$70,100/85,100
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Married filing separately
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$0
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$0
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Gift and Estate Tax Unified Credit Equivalent
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2009
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2010
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Federal
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$3,500,000
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TBD
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Minnesota Filing Threshold
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$1,000,000
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$1,000,000
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Wisconsin Filing Threshold
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N/A
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N/A
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Automobile Standard Mileage Allowances
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2009
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2010
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Business
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0.55
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.50
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Charitable
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$0.14
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$0.14
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Medical/Moving
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0.24
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.165
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Automobile Depreciation Limits
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2009
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2010
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First year
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$2,960
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$3,060
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with bonus depreciation
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$10,960
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N/A
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Second year
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$4,800
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$4,900
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Third year
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$2,850
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$2,950
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Fourth year and thereafter
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$1,775
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$1,775
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Light Trucks & Vans Depreciation Limits
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2009
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2010
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First year
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$3,060
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$3.160
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with bonus depreciation
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$11,060
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N/A
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Second year
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$4,900
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$5,100
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Third year
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$2,950
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$3,050
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Fourth year and thereafter
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$1,775
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$1.875
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Max Deductible 401(k) and 403(b) Employee Contribution
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2009
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2010
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$16,500/22,000(2)
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$16,500/22,000(2)
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Self Employed Health Insurance Deduction Allowed Against AGI
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2009
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2010
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100%
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100%
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Earnings Limit for Social Security
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2009
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2010
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Below age 65
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$14,160
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$14,160
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Age 65 (months prior to birthday)
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$37,680
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$37,680
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Age 65-69
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Unlimited
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Unlimited
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Age 70 and above
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Unlimited
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Unlimited
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(1) If an individual who can be claimed as a dependent on another’s return has earned income, the standard deduction for 2009 is the greater of $950 or $300 plus the earned income. However, the deduction may not exceed the regular standard deduction for that individual.
(2) For participants who have attained age 50 by the end of the year, the higher limit is applicable.
(3) For years beginning after 2009, the phase-out of persoanl exemptions and itemized deductions no longer applies.
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