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News Wrap: Federal Student Loan Default Rate Jumps to 8.8%

Know the transcript: to.pbs.org In other news Monday, the Bank on of Education reported that the default rate on federal student loans jumped ...

2009 Individual Federal Tax Changes

2009 Individual Federal Tax Changes

ECONOMIC RECOVERY PAYMENTS – You do not have to include payments as taxable income on your federal return

HOME BUYERS TAX CREDIT UPDATED – Extends the $8,000 home buyers credit through April 30, 2010 & close by July 1, 2010. A new $6,500 credit for existing homeowners.  Existing homeowners must have owned their principle residence for at least five of the previous eight years to qualify  The income phase out has increased considerably, individuals between $125,000 to $145,000 & Joint filers between $225,000 and $245,000.  You can still treat the purchase as done by December 31 to claim the credit on a prior years return.

SAVINGS BONDS – You can use your refund to buy up to $5,000 in U.S. series I savings bonds in multiples of $50

CASH FOR CLUNKERS – The payment is not taxable income for Federal tax purposes.

UNEMPLOYMENT COMPENSATION – You do not have to pay tax on unemployment compensation up to $2,400.

AMERICAN OPPORTUNITY EDUCATION CREDIT (HOPE) – Maximum Hope education credit is increased to $2,500 and renamed.  Part of the credit can be refundable.

QUALIFYING CHILD DEFINITION REVISED – The who can claim a child has changed.  Most  will not be effected, some will and we will deal with this during tax preparation.

EARNED INCOME CREDIT (EIC) – It has increased for people with three or more children and for some married couples filing jointly.  Will deal with those if they apply, at tax time

DIVORCED OR SEPARATED PARENTS & CHILDS EXEMPTION – Only Form 8332 can be used for divorces effective after 2008 to claim the exemption if you are not the custodial parent.

TAX ON CHILD’S INVESTMENT INCOME – The amount of taxable investment income a child can have without it being subject to tax at the parent’s rate has increased to $1,900.

ALTERNATIVE MINIMUM TAX (AMT) – The exemption amount is increased to $46,700 single & $70,950 MFJ.

MILEAGE RATES – No split rate for 2009.  Business use of your auto is 55 cents.  Charitable is 14 cents.  Medical is 24 cents.  Moving is 24 cents.

CHILD TAX CREDIT – It has increased to 3 children.

NONBUSINESS ENERGY PROPERTY CREDIT – Equals 30% of what homeowner spends on eligible energy-saving improvements, up to a maximum of $1,500. Credit is limited to a total of $1,500 over the 2009 & 2010 tax years.  High efficiency heating & air condition systems, water heaters, stoves that burn biomass along with labor costs for installing.  In addition, the cost of energy-efficient windows and skylights, energy-efficient doors, qualifying insulation and certain roofs also qualify, though the cost of installing these items does NOT qualify. This continues for 2010.

STANDARD DEDUCTION vs. ITEMIZED – for  2009 if you do not itemize but own your home you can deduct your real estate taxes up to which it is an add on of $1,000 MFJ or $500 single to your standard deduction.

FORECLOSED MORTGAGE TEMPORARY RELIEF EXCLUSION – For 2008 thru 2012 you can exclude Cancellation of Debt from income on the loss of the secured debt on principle residence so you do not have to include the forgiveness as income.

CAPITAL GAINS LONG TERM AND DIVIDEND  ZERO TAX RATE MAYBE – 2008 thru 2010 Dividend and LT Capital Gain will have zero tax rate if you are in the 10% or 15% tax bracket and must have owned over a year.  For 2009 the 25% tax bracket starts with taxable incomes greater than $67,900 for MFJ and $33,950 if Single.  Great for those who are retired with little income. The capital gains tax rate for those over these amounts is the 15%.

FILING DEADLINE – April 15 2010 is the deadline nationally this year to file your 2009 individual tax return.

IRA & ROTH CONTRIBUTIONS – Deduction limit is $5,000 for 2009.  Those age 50 and over can make an additional $1,000 contribution.  If covered by another plan & MFJ phaseout IRA $89,000 – $109,000.  Roth MFJ less than $176,000. A married couple filing a joint return can contribute up to $5,000 each to their IRA’s even if one spouse had little or no income, subject to the income limits for phaseouts.  Even if your spouse is covered by an employer sponsored retirement plan.

401K RETIREMENT CONTIBUTIONS – Maximum is $16,500 and if over 50 the catch-up amount is $5500 for a total of $22,000

EXEMPTION AMOUNT INCREASED – The amount you can deduct for each exemption will increase to $3,650.

STANDARD DEDUCTIONS – MFJ is $11,400; Single is $8,350; HH is $8,350.

ITEMIZED DEDUCTION PHASEOUT – Starts at $166,800 for single and $250,200 for MFJ..

NANNY TAX THRESHOLD – For 2009 is $1,700, before you have to report social security & Medicare.

QUALIFIED TUITION FEES DEDUCTION – This $4,000 deduction has been extended through 2009.

ANNUAL GIFT TAX EXCLUSION – The amount is now $13,000.

TEACHER DEDUCTION – Extended for 2009 and is $250 for out of pocket cost for books, supplies etc and work at least 900 hours per school year.

STUDENT LOAN INTEREST DEDUCTION – $2500, the deduction fully phases out with MAGI of $145,000..

CASH CHARITABLE CONTRIBUTIONS – You cannot deduct a cash contribution, regardless of the amount, unless you keep as a record of the contribution, a bank record or written communication from the charity.

ROTH CONVERSIONS – Individuals with income of $100,000 or less can convert a IRA to a Roth IRA.

SALES TAX DEDUCTION ON NEW VEHICLES – The credit is available on cars priced up to $49,500.  Taxpayers don’t need to itemize to take the deduction, it can simply be added to the standard deduction.

Source: Robert S. Brennen & Associates LTD

Bank One Student Loans – Why is it That Many Students Are Attracted to Bank One

Loan they got, they still can’t pay the total amount of school and tuition fees. The best answer to that ‘financial gap’ is Bank One. Keep in mind that Chase is a private company and so the student loans that you can obtain are private in nature and are not funded by the federal government. But a good thing about these Bank One loans is that the repayment schemes are similar to that of the federal or government student loans.

If you think that you will be able to finish loan , make sure that you get Bank One offered by Chase. The loans are of different types and so you can be sure that your needs will be answered. Whether you’re a graduating student, an undergrad, a technical student, or a trade school student.

Why is it that many students are attracted to Bank One? One of the evident reasons is that the

Source: interestingbank.com