Increased personal exemption is $3,650 (up from $3,500 in 2008, will remain $3,650 in 2010).
Increased Standard Deduction:
- Married filing Joint / Qualifying Widower: $11,400
- Head of Household: $8,350
- Single / Married filing Separate: $5,700
Additional Child Tax Credit
Earned Income amount used to figure the additional child tax credit is 15% of the income that exceeds $3,000 (down from $8,500). To take advantage of this credit, complete Form 8812 and report the total on Form 1040, line 65.
Maximum amount of wages subject to social security tax is $106,800 (up from $102,000)
Standard Mileage Rates: Business purposes is 55 cents per mile; medical reasons and moving expenses is 24 cents per mile; charitable purposes is still 14 cents per mile
IRA contribution limits remain unchanged.
Health Savings Accounts (HSAs)
Maximum deduction is now $3,000 ($5,950 for family coverage). Minimum annual deductible of a high deductible plan is $1,150 ($2,300 for family coverage). Complete Form 8889 and report the deduction on Form 1040, line 25.
- Investment income over $1,900 of a child age 18 or younger will be taxed at the parent's rate on Form 8615.
- Parents may be able to include on their own return the child's gross income in excess of $1,900 on Form 8814.