2009 Tax Changes
for the Self-Employed
Source:
MARKETWIRE
Publication
date: 2010-01-13
Prior to preparing 2009 tax forms, the self-employed
and micro-businesses (fewer than 10 employees) should be
aware of a few tax law changes, including changes in the
standard mileage rate and the self-employment tax.
"January is a great time to get a jump on your 2009
tax return," said Keith Hall, national tax advisor
for the National Association for the Self-Employed (NASE).
"The earlier a business owner can get organized,
the more likely he or she will have the time to
investigate eligibility requirements for additional tax
benefits."
The following tax law changes relate to 2009 returns:
-- Homebuyer Credits -- If you operate a business
from an office in your home, you may be eligible for
additional tax incentives. Depending on when the home
was purchased and how long you lived in a prior
residence, you may be eligible for a credit of up to
$8,000. The credit is similar to an interest-free loan.
-- Making Work Pay Tax Credit -- Many taxpayers will
qualify for a making work pay credit of $800, if married
and filing jointly, or $400 for other taxpayers. The
credit is equivalent to 6.2 percent of earned income up
to the maximum amount.
-- Standard Mileage Rates Adjusted for 2009 --
Business owners using their vehicle for company business
can deduct 55 cents per mile driven on their 2009 tax
return. The rate has also been set for 2010 at 50 cents
per mile.
-- Contribution Limits for IRAs and Other Retirement
Plans -- Where an IRA contributor who is not covered by
a workplace retirement plan is married to someone who is
covered, the deduction is phased out if the couple's
income is between $167,000 and $177,000.
-- Self-Employment Tax Changes -- The tax rate for
self-employed business owners remains at 15.3 percent,
though the income threshold has increased to $106,800.
All net earnings from self-employment of at least $400
are subject to the Medicare part of the tax.
-- AMT Exemption Increased for 2009 -- For tax year
2009, the exemption for a married couple filing a joint
return is $70,950, $35,475 for a married person filing
separately, and $46,700 for singles and heads of
household. Children who earn less than $6,700 are not
subject to the AMT.
Worried you will be unable to meet your tax
obligation? It is important you still file your return
even if you are unable to pay the tax you owe. Contact
the IRS at 1-800-829-1040 as soon as possible if you
foresee tax payment difficulties. The agency will work
with you to discuss your options.
In preparation for the filing deadline, self-employed
business owners can turn to Hall and other qualified
CPAs for help through NASE's TaxTalk program here. While
there, they can submit a tax question and browse the
TaxTalk resource library.
Find out more information about these and other tax
law changes for the 2009 tax season at www.IRS.gov.
About the NASE
The National Association for the Self-Employed (NASE)
is the nation's leading resource for the self-employed
and micro-businesses, bringing a broad range of benefits
to help entrepreneurs succeed and to drive the continued
growth of this vital segment of the American economy.
The NASE is a 501(c) (6) non-profit organization and
provides big-business advantages to hundreds of
thousands of micro-businesses across the United States.
For more information, visit the association's web site
at www.NASE.org.
SOURCE: National Association for the Self-Employed (NASE)
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