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2009 Inflation Adjustments Announced

Categories Tax Tips (Fed)

The IRS has released Revenue Procedure 2008-66 announcing increases in deductions, exemptions, limitations, and credits for 2009, as well as widened tax brackets. Key changes affecting 2009 returns include the following:

  • The value of each personal and dependency exemption increases to $3,650.
     
  • The new standard deduction is $11,400 for married couples filing a joint return, $5,700 for singles and married individuals filing separately, and $8,350 for head of household.
     
  • Tax-bracket thresholds increase for each filing status. For a married couple filing a joint return, the taxable-income threshold separating the 15-percent bracket from the 25-percent bracket is $67,900.
     
  • The maximum earned income tax credit for low and moderate income workers and working families with two or more children is $5,028. The income limit for the credit for joint return filers with two or more children is $43,415.
     
  • The annual gift exclusion rises to $13,000, up from $12,000 in 2008.

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