A continuing discussion of the tax law changes for the 2009 Form 1040 Individual Income Tax Return. Students (or prospective students), make sure that you check out the details on the Hope credit below!
Tax - Line 44: The amount of taxable investment a child can hve without being subject to tax at the parent's rate has increased to $1,900. Reminder - "Kiddie Tax" now applies to all child dependents, regardless of age.
Alternative Minimum Tax - Line 45: For 2009, the AMT exemption amounts are increased to $70,950, $46,700 and $35,475 for MFJ, Single, and MFS respectively. This does not mean AMT will necessarily apply to taxpayers earning more than these amounts, but you must file Form 6251 to determine if AMT applies.
Education Credits - Line 49: Hold on to your horses! Lots of beneficial changes here! The American Opportunity Tax Credit increases the Hope credit from $1,500 to up to $2,500 of the cost of tuition and related expenses (now including books). The Hope credit is applied to 100% of the first $2,000 of qualifying expenses, and 25% of the next $2,000 of qualifying expenses. The credit is now available for the first for years of post-secondary education in a degree or certificate program, and is potentially refundable. Wow! What a deal!
Credits from Certain Forms - Line 52: Credits available in 2009 includ the Residential Energy Efficient Property Credit (first available in 2007, then not available in 2008, and back for 2009), and Qualified Adoption Expenses.
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