New Homeowners

There are a couple of changes for home owners this year. First time homeowners may qualify for an interest free loan of up to $7,500. In addition, home owners who do not itemize can deduct a portion of their taxes and mortgage interest.

New homeowners: If you purchased a home after April 9, 2008 and before July 1, 2009, you can take an interest free loan for up to $7,500. New homeowners can receive a refundable credit for 10% of what they paid for their home and pay it back over 15 years.

Homeowners who don't itemize: If you don't itemize you are allowed to take a $500 ($1,000 for married filers) deduction for mortgage interest and real estate taxes.

There are more rules to the new homeowner's credit, talk with your tax professional to see if you qualify.

Capital Gains Tax Rates

The capital gains rates for individuals in the 10% and 15% tax brackets are zero for this year. This means that individuals taking the standard deduction and making less than $41,500 and a married couple filing together making less than $83,000 will pay no capital gains tax.

Kiddie Tax-

Rules have changed for the kiddie tax. Children under the age of 24 who are full time students may be subject to their parent’s tax rate for unearned income over $1,800.

Roth Conversions-

The income limits on Roth conversions disappears in 2010. This means if you have a traditional or non- deductible IRA, you will be able to roll it over to a Roth regardless of income level.

Adjustments for inflation:

Standard Deduction:
    Single                                 $5,450
    Married                              $10,900
    Head of Household             $8,000

Person Exemption                   $3,500

Business Mileage:

1/1 - 6/30                   50.5 ¢ per mile
7/1 - 12/31                 58.5 ¢ per mile

Medical and Moving Mileage:

11/1 - 6/30                    19.0 ¢ per mile
7/1 - 12/31                  27.0 ¢ per mile

Charitable Mileage       14.0 ¢ per mile