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Guidance – Heroes Earnings Assistance and Relief Tax Act of 2008
October 30, 2009 2:19 pm / Leave a comment
Notice 2009-85 provides guidance under section 877A, which was enacted by section 301 of the Heroes Earnings Assistance and Relief Tax Act of 2008 (the “Act”) and applies to individuals who expatriate on or after June 17, 2008. Section 877A generally provides that all property of a “covered expatriate” is treated as sold on the day before the individual’s expatriation date. Gain and loss from the deemed sale must be taken into account at that time (subject to a $600,000 exclusion amount, which will be indexed for inflation – Exclusion amount for 2009 is $626,000) unless the individual elects to defer payment of the tax by providing security and waiving treaty rights that would prevent assessment or collection of the deferred tax. There are special rules for deferred compensation items, specified tax deferred accounts, and interests in nongrantor trusts.
Notice 2009-85 will be in IRB 2009-45, dated November 9, 2009.
2010 TAX BRAKETS, STANDARD DEDUCTIONS AND OTHER 2010 ADJUSTMENTS REV PROC 2009-50
October 18, 2009 2:15 pm / Leave a comment
WASHINGTON — Tax rate brackets and various tax benefits will remain unchanged or change only slightly in 2010 due to inflation, the Internal Revenue Service announced today.
By law, the dollar amounts for a variety of tax provisions must be revised each year to keep pace with inflation. As a result, more than three dozen tax benefits are subject to inflation adjustments each year, but because recent inflation factors have been minimal, many of these benefits will remain unchanged or change only slightly for 2010.
Key provisions affecting 2010 returns, filed by most taxpayers in early 2011, include the following:
The value of each personal and dependency exemption available to most taxpayers is $3,650, unchanged from 2009.
The new standard deduction for heads of household is $8,400, up from $8,350 in 2009. For other taxpayers, the standard deduction remains unchanged at $11,400 for married couples filing a joint return and $5,700 for singles and married individuals filing separately. Nearly two out of three taxpayers take the standard deduction rather than itemizing deductions, such as mortgage interest, charitable contributions, and state and local taxes.
various tax bracket thresholds will see minor adjustments. For example, for a married couple filing a joint return the taxable income threshold separating the 15 percent bracket from the 25 percent bracket is $68,000, up from $67,900 in 2009.
The annual gift tax exclusion remains unchanged at $13,000.
Details on these and other inflation adjusted items for 2010 can be found in Revenue Procedure 2009-50.
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