Friday, October 17, 2008

IRS AND SSA ANNOUNCE 2009 INFLATION-ADJUSTED NUMBERS

Yesterday (Thursday) the IRS and the Social Security Administration announced some of the various inflation adjustments for 2009. Here is the word -

* The value of each personal exemption, for the taxpayer, spouse and dependents, is $3,650 for 2009, up $150 from 2008.

* The new standard deduction amounts for 2009 are -

· $11,400 for married couples filing a joint return (up $500),
· $5,700 for singles and married individuals filing separately (up $250), and
· $8,350 for heads of household (up $350).

* The maximum Earned Income Tax Credit (EITC) for low and moderate income workers and working families with two or more children is $5,028, up from $4,824. The income limit for the credit for joint return filers with two or more children is $43,415, up from $41,646.

* The 2009 annual contribution limits for retirement plans are:

· $16,500.00 (plus an additional $5,500.00 if age 50 or older at the end of 2008) for 401(k) and 403(b) plans
· $16,500.00 (plus an additional $5,500.00 if age 50 or older at the end of 2008) for 457 plans (Deferred Compensation for state and local government employees)
· $11,500.00 (plus an additional $2,500.00 if age 50 or older at the end of 2008) for SIMPLE plans
· $49,000.00 for Defined Contribution KEOGH plans
· $49,000.00 for Self-Employed SEP plans (allowable contribution equal to 25% of net earnings up to $245,000, which translates to 20% multiplied by the total of "net earnings from self-employment" from Schedule C, Schedule C-EZ or Form K-1 less the deduction for 50% of self-employment tax)

* The compensation limit for participation in a SEP is $550.00.

* The annual gift exclusion rises to $13,000, up from $12,000 in 2008.

* Monthly Social Security and Supplemental Security Income benefits will increase 5.8% in 2009, the largest COLA increase since 1982, effective with benefits received in January 2009.
.
Social Security and Supplemental Security Income benefits increase automatically each year based on the rise in the Bureau of Labor Statistics' Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), from the third quarter of the prior year to the corresponding period of the current year.

* Based on the increase in average wages, the maximum amount of earnings subject to the Social Security tax (taxable maximum) for 2009 will increase to $106,800 from $102,000. The maximum Social Security tax to be withheld from wages in 2009 will increase to $6,621.60 from $6,324.00. The maximum amount of the Social Security portion of “self-employment tax” will be $13,243.20.

* For most Social Security beneficiaries the standard monthly Part B premium will be $96.40 in 2009.

The monthly premium will be higher if you filed a 2007 individual tax return and your modified AGI for 2007 was more than $85,000, or if you are married (file a joint tax return) and your annual income is more than $170,000. The premiums for the “higher income” beneficiaries will be as follows-

SINGLE:
Premiums - - Income of:
$ 96.40 - - - $85,000 or less
$134.90 - - - $85,001-$107,000
$192.70 - - - $107,001-$160,000
$250.50 - - - $160,001-$213,000
$308.30 - - - Above $213,000
.
MARRIED FILING JOINT:
Premiums - - Income of:
$ 96.40 - - - $170,000 or less
$134.90 - - - $170,001-$214,000
$192.70 - - - $214,001-$320,000
$250.50 - - - $320,001-$426,000
$308.30 - - - Above $426,000
.
MARRIED FILING SEPARATE:
Premiums - - Income of:
$ 96.40 - - - $85,000 or less
$250.50 - - - $85,001-$128,000
$308.30 - - - Above $128,000

For more info on the IRS increases click here and here – click here and here for info on the Social Security changes – and click here and here for more info on the Medicare Part B premiums.

I will report on additional 2009 numbers of interest here as information becomes available. Within the next two weeks I will be creating a WHAT’S NEW FOR 2009 Page on my website at
www.robertdflach.net. I will let you know when it is “up and running”.

TTFN

1 comment:

sweeneya said...

Things looked better back in 2009. I am carrying out a research dedicated to the crisis and trying to find oout where it all began. 2009 seems to be the last good year.
By the way I use free screen recorder for my researches, it aids me tremendously in my work.