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Unemployment Benefits: first $2,400 is Tax Free for 2009.
Unfortunately CA state income taxes went up in 2009
For this new year of 2010 social security will be deducted from your paycheck all the way up to $106,800.
Save for the future with a Roth IRA contribution. These are not deductible now, but are tax free for life. Special rules pertaining to IRAs pertain to the Roth IRA.
For 2009 and 2010 you can contribute $5,000 to a Roth or Traditional IRA and for age 50 and over you can contribute up to $6,000. High income earners do not qualify.
For self-employed individuals the maximum contribution to your SEP is $49,000 in 2009.
401(k) Plan Contributions to your 401(k) plan at work will now allow up to $16,500 per year for 2009 and 2010. For those aged 50 and older you can make an additional catch-up contribution of $5,500 in 2009 and 2010.
The automobile business mileage expense deduction for 2009 was 55 cents per mile.
For 2010 it is 50 cents per mile.
Up to $2,500 of interest on qualified Student Loans can be deducted. The deduction phases out on joint returns between $120,000 and $150,000 & on single returns between $60,000 and $75,000.
College education credits: These credits can be taken if your income is below $116,000 if married and $58,000 for single filers. Hope credit is up to $1,800 of tuition expenses during the first two years of college. Or, lifetime credit is up to $2,000 of tuition expenses paid for (if after the first two years of college).
A deduction for up to $4,000 of College Tuition & related expenses is allowed. For single taxpayers which income above $65,000 & married taxpayers above $130,000 the credit will be reduced.
The amount you can deduct for each personal and dependent exemption has increased to $3,650 in 2009.
Renter's credit for state tax is again available. $60 for single taxpayers that are under $34,412 income. $120 for joint filers less than $69,824.
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