2009 income tax rates, brackets : Bad Credit Advisor

2009 income tax rates, brackets

Here we go again, time to plan and check your 2009 income tax rates and brackets, and get together with your accountant. Or if your taxes are simple enough, your IQ is reaching triple digits and, most importantly, you have time on your hands, look for the latest do-it-yourself tax software. What a way to start Thanksgiving morning. Every year around end of November, beginning of December, I am getting a bit anxious. May be even apprehensive and 2009 is no different. The income tax rates and brackets are staying the same as a year ago and are hopefully will be the same next year. Then in 2011, you can expect a huge hit, especially in the top bracket. Your income tax rate will be getting dangerously close to 40%. I do not care about all the 2012 doomsday predictions, but many of you will be living in Canada by that time. After all, what will be the difference? Canadians have fewer people, more woods and open water, and their system works, barely. Anyway, the image below shows 2009 income tax rates as well as the rates for a few other years, for Single tax filers or Married Filing Jointly. Qualifying Widow/Widower bracket rates are the same as those of Married Filing Jointly. For more detailed descriptions, continue below.

2009 income tax rates - Married Filing Separately Filing Status
- 10% on the income between $0 and $8,350
- 15% on the income between $8,350 and $33,950
- 25% on the income between $33,950 and $68,525
- 28% on the income between $68,525 and $104,425
- 33% on the income between $104,425 and $186,475
- 35% on the income over $186,475

2009 income tax rates - Head of Household Filing Status
- 10% on the income between $0 and $11,950
- 15% on the income between $11,950 and $45,500
- 25% on the income between $45,500 and $117,450
- 28% on the income between $117,450 and $190,200
- 33% on the income between $190,200 and $372,950
- 35% on the income over $372,950

Some notable changes for 2009 income tax include,
Exemption value
Available to most taxpayers, each personal and dependency exemption is $3,650, up $150 from 2008.
2009 Standard deduction
- $11,400 for married couples filing a joint return, up $500
- $5,700 for singles and married individuals filing separately, up $250
- $8,350 for heads of household, up $350
2009 tax-bracket thresholds
They increase for each filing status. For example, for a married couple filing a joint return, the taxable-income threshold separating the 15% bracket from the 25% bracket is $67,900, up from $65,100 in 2008.
Maximum earned income tax credit
For low and moderate income workers and working families with 2 or more children is $5,028, up from $4,824 while the income limit for the credit for joint return filers with 2 or more children is $43,415, up from $41,646.
Annual gift exclusion
The annual gift exclusion rises to $13,000 in 2009, up from $12,000 in 2008. What it means that you can give someone a gift for $13,000 or less, and will not have to pay federal gift tax. Thus, a married couple can give up to $26,000 to a person.
Social Security contribution and wage benefit base
Increased to $106,800 from $102,000, up $4,800. Thus, 2009 incomes of over $106,800 are not subject to Social Security taxation. At the Social Security tax rate of 6.20%, this means that the maximum you pay in Social Security taxes for 2009 is $6,621.60. It is also the case for 2010. See more here.
Traditional and Roth IRA contribution limits
Those have not changed. $5,000 per year for the folks under age 50, and $6,000 per year for those 50 and over.
2009 Roth IRA income limits
Those increased to $166,000 from $159,000, up $7,000 for married filing jointly couples, and increased to $105,000 from $101,000, up $4,000 for singles and others.

Wed Nov 25, 2009 09:11AM by Tony | More in Personal Finance | Comments (0)

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