2010 Tax Changes; Individual
1. Social Security and Medicare
For 2010, the Medicare tax will remain at 1.45% while Social Security remains at 6.20%. The wage limit, or Social Security maximum, remains at $106,800.
2. Investment income amount
The maximum amount of investment income you can have and still get the credit is still $3,100 for 2010.
3. Retirement Account Contributions
No Changes
4. Energy Tax Credits
Extended through 12/31/10
WHAT HAS CHANGED?
1. Standard Deductions in 2010
In 2010, there was only one change to the standard deductions - the head of household standard deduction went up by $50. The deduction for all other taxpayers remained the same. The standard deductions that apply in 2010 include:
Single - $5,700
Married filing separately - $5,700
Head of household - $8,400
Married taxpayers filing jointly / qualifying widow(er)s - $11,400
2. The maximum amount of the credit has increased.
$3,050 if you have one qualifying child,
$5,036 if you have two qualifying children,
$5,666 if you have three or more qualifying children, or
$457 if you do not have a qualifying child.
3. Earned income amount increased.
You may be able to take the credit if:
You have three or more qualifying children and you earn less than $43,352 ($48,362 if married filing jointly),
You have two qualifying children and you earn less than $40,363 ($45,373 is married filing jointly),
You have one qualifying child and you earn less then $35,535 ($40,545 if married filing jointly), or
You do not have a qualifying child and you earn less then $13,460 ($18,470 if married filing jointly).
4. Mileage deduction rates (Decreased)
Category Rate
Business Miles50.0 cents per mile
Charitable Services14.0 cents per mile
Medical Travel16.5 cents per mile
5. Lifetime Learning and Hope Credits
The maximum Hope Credit, available for the first two years of post-secondary education, has increased to $2,500. This includes 100% of qualifying tuition and related expense not in excess of $2,000 plus 25% of those expenses that do not exceed $4,000.
In 2010, the taxpayer's modified adjusted gross income will be used to determine the reduction in the amount of the Hope Scholarship and Lifetime Learning Credits. Credit reductions start for taxpayers with an AGI in excess of $80,000, or $160,000 for those filing joint returns for the Hope Credit. The threshold for the Lifetime Learning Credit remains at $50,000, or $100,000 for those filing joint returns in 2010.
For 2010, the Medicare tax will remain at 1.45% while Social Security remains at 6.20%. The wage limit, or Social Security maximum, remains at $106,800.
2. Investment income amount
The maximum amount of investment income you can have and still get the credit is still $3,100 for 2010.
3. Retirement Account Contributions
No Changes
4. Energy Tax Credits
Extended through 12/31/10
WHAT HAS CHANGED?
1. Standard Deductions in 2010
In 2010, there was only one change to the standard deductions - the head of household standard deduction went up by $50. The deduction for all other taxpayers remained the same. The standard deductions that apply in 2010 include:
Single - $5,700
Married filing separately - $5,700
Head of household - $8,400
Married taxpayers filing jointly / qualifying widow(er)s - $11,400
2. The maximum amount of the credit has increased.
$3,050 if you have one qualifying child,
$5,036 if you have two qualifying children,
$5,666 if you have three or more qualifying children, or
$457 if you do not have a qualifying child.
3. Earned income amount increased.
You may be able to take the credit if:
You have three or more qualifying children and you earn less than $43,352 ($48,362 if married filing jointly),
You have two qualifying children and you earn less than $40,363 ($45,373 is married filing jointly),
You have one qualifying child and you earn less then $35,535 ($40,545 if married filing jointly), or
You do not have a qualifying child and you earn less then $13,460 ($18,470 if married filing jointly).
4. Mileage deduction rates (Decreased)
Category Rate
Business Miles50.0 cents per mile
Charitable Services14.0 cents per mile
Medical Travel16.5 cents per mile
5. Lifetime Learning and Hope Credits
The maximum Hope Credit, available for the first two years of post-secondary education, has increased to $2,500. This includes 100% of qualifying tuition and related expense not in excess of $2,000 plus 25% of those expenses that do not exceed $4,000.
In 2010, the taxpayer's modified adjusted gross income will be used to determine the reduction in the amount of the Hope Scholarship and Lifetime Learning Credits. Credit reductions start for taxpayers with an AGI in excess of $80,000, or $160,000 for those filing joint returns for the Hope Credit. The threshold for the Lifetime Learning Credit remains at $50,000, or $100,000 for those filing joint returns in 2010.
