Tax Planning & Compliance Blog

As you begin preparing your 2009 tax individual or corporate tax return, there are several items to keep in mind.

What Individuals need to watch out for when filing 2009 returns:

• Effects of the American Recovery and Reinvestment Act of 2009:
      - Making Work Pay Credit
      - Changes to the Alternative Minimum Tax
      - First Time Home Buyer Credit
      - American Opportunity Credit
      - Long-Time Resident Home Buyer Credit
      - Energy Efficiency Credits
      - For more information, read our overview of the American Recovery and Reinvestment Tax Act of 2009 – 
        Individual Tax Provisions.
• Definition of a dependent:
      - More detailed (and confusing) definition of  who qualifies as a dependent 
      - Detailed rules for non-custodial parents to take qualifying child as a dependent
• Changes for homeowners:
      - Mortgage Forgiveness Debt Relief Act of 2007 and the rules for reporting cancellation of debt
      - Deduction for real estate taxes paid for non-itemizers
• The amount of the phase-out for itemized deductions is reduced
• Installment agreements can now be applied for online

What Businesses need to be aware of for 2009 returns:

• Bonus depreciation of 50% is extended for property placed in service before 1/1/10
• Section 179 expense limit of $250,000 remains in effect for 2009
• Net Operating Loss (NOL) carrybacks can be carried back 3,4 or 5 years, with some limitations
• New IRS rules regarding Cancellation of Debt income for S Corps
• 15 year write-off allowed for certain leasehold, restaurant and retail improvements
• Penalty for late filing of Partnership or S Corporations raised to $195 per owner
• Possibly minimizing self-employment tax of LLC
• Proposed IRS regulations contain rules for expensing vs. capitalizing repairs and property acquisitions
• For more information, read our overview of the American Recovery and Reinvestment Tax Act of 2009 – Business Tax Provisions.