With only a few weeks left in 2009, now is definitely the time to look ahead to 2010 and what it can mean for your finances. My brother is my accountant, so I leave most of the paperwork to him, but I still need to know what big changes might be coming along from year to year. So in order to help you (and me!) out, I went looking for information on what tax law changes we have in store for 2010, and this is what I found…
No more deduction of new vehicle sales tax – Starting January 1 you can no longer take the itemized deduction or increase in standard deduction for sales tax on the purchase of a new car.
First-time Home Buyer Credit – The qualification period for first-time home buyers to purchase a home and qualify for the credit will continue through May 1, 2010.
Teacher deduction expires – I hope they reinstate this one, as teachers are given the shaft already. (I wrote about this $250 deduction before)
Unemployed? ““ In 2009, those receiving unemployment benefits could exclude up to $2,400 from their taxable income, but this ends in 2010.
Roth IRA conversion ““ There are no income limits in 2010 for individuals that would like to convert a traditional IRA to a Roth IRA. Also, for any conversions in 2010, the tax will be paid in 2011 and 2012. Pretty cool. Check out this list of where to open a Roth IRA.
Charitable distributions / contributions ““ Charitable distributions made directly from your IRA account to charity will no longer be excluded from your income.
Alternative Minimum Tax (AMT) ““ The AMT exemption is scheduled to decrease to $33,750 for single filers and to $45,000 for those filing a married joint return. They need to do something about the AMT immediately before more and more lower-income people get sucked into it.
Sales tax ““ No more itemized deductions for state and local sales tax.
So, these are the changes I found. Those of you who know of others or are professionals, please weigh in with changes you know about!