New Rules for Children of Divorced or Separated Parents PDF Print E-mail
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Thursday, 04 February 2010 06:12

Revocation of release of claim to an exemption. For tax years beginning after July 2, 2008 (the 2009 calendar year for most taxpayers), new rules apply to allow the custodial parent to revoke a release of claim to exemption that was previously released to the noncustodial parent on Form 8332, Release/Revocation of Release of Claim to Exemption for Child by Custodial Parent, or similar form. The revocation is effective no earlier than the tax year following the year in which the custodial parent provides, or makes reasonable efforts to provide, the noncustodial parent with written notice of the revocation. Therefore, if the custodial parent provides notice of revocation to the noncustodial parent in 2009, the earliest tax year the revocation can be effective is the tax year beginning in 2010. You can use Part III of Form 8332 for this purpose. You must attach a copy of the revocation to your return for each tax year you claim the child as a dependent as a result of the revocation.

Post-1984 decree or agreement. If the divorce decree or separation agreement went into effect after 1984 and before 2009, the noncustodial parent can still attach certain pages from the decree or agreement instead of Form 8332 provided that these pages are substantially similar to Form 8332. For any decree or agreement executed after 2008, the noncustodial parent must attach Form 8332 or a similar statement signed by the custodial parent and whose only purpose is to release a claim to exemption.
Last Updated on Friday, 05 February 2010 22:07
 

News Flash

Tax Facts for 2009

The IRS updates several tax-related amounts each year to take into account the cost of living adjustments due to inflation. Here's a quick summary of all the essential tax figures for the year 2009.

Standard Deductions

Single: $5,700
Head of Household: $8,350
Married Filing Joint: $11,400
Married Filing Separately: $5,700
Qualifying Widow/Widower: $11,400
Dependent: $950-$5,700*
Additional Amount if Blind: $1,100 (for married filing joint, married filing separately, or qualifying widow); $1,400 (for single and head of household)
Additional Amount if age 65 or older: $1,100 (for married filing joint, married filing separately, or qualifying widow); $1,400 (for single and head of household).
More information about the standard deduction.
* Dependents must calculate their standard deduction using an IRS Worksheet.

Personal Exemptions

Per taxpayer and dependent: $3,650
More information about personal exemptions.

Phaseout of Personal Exemptions

The amount you can claim for personal exemptions starts to be reduced (or "phased out") once you reach certain income thresholds. If your income is within these ranges, your personal exemptions will be reduced. If your income exceeds the amounts listed below, your personal exemption is $2,433.
Single: $166,800 - $289,300
Head of Household: $208,500 - $331,000
Married Filing Joint: $250,200 - $372,700
Married Filing Separately: $125,100 - $186,350
Qualifying Widow/Widower: $250,200 - $372,700

More information about the personal exemptions.

Filing Requirement Thresholds

You are required to file a tax return if your income exceeds the combined total of your standard deduction and personal exemption. Here's the 2009 filing requirement thresholds:
Single: $9,350 ($10,750 if age 65 and over)
Head of Household: $12,000 ($13,400 if age 65 and over)
Married Filing Joint: $18,700 ($19,800 if one spouse age 65 and over; $20,900 if both spouses age 65 and over)
Married Filing Separately: $3,650 (any age)
Qualifying Widow/Widower: $18,700 ($19,800 if age 65 and older)

Retirement Plan Limits

You can save for retirement up to the maximum dollar limit. Maximum contributions vary by the type of retirement plan:
Traditional or Roth IRA: $5,000 ($6,000 if age 50 or older)
SEP IRA: $49,000
SIMPLE IRA: $11,500 ($14,000 if age 50 or older)
401(k) plan: $16,500 ($22,000 if age 50 or older)
403(b) plan: $16,500 ($22,000 if age 50 or older)
457 plan: $16,500 ($22,000 if age 50 or older)
Defined Contribution Pension: $49,000
Defined Benefit Pension: $195,000
More information about retirement planning.
*If you fund both a traditional and Roth IRA, your total contribution to cannot exceed $5,000 combined (or $6,000 if age 50 or older).
**SEP IRA contributions are calculated on an IRS worksheet. Your maximum contribution may be less than $49,000.

Standard Mileage Rate for 2009

You can deduct the cost of driving a vehicle for business-use, for traveling to a doctor, when relocating for a new job, or when you are engaged in charitable activities. The 2009 standard rates for mileage are:

  • 50 1/2 cents per mile for business (Jan 1 - June 30),
  • 58 1/2 cents per mile for business (July 1 - Dec 31), and
  • 19 cents per mile for business (Jan 1 - June 30), and
  • 27 cents per mile for business (July 1 - Dec 31), and
  • 14 cents per mile for charitable service.

More information about deducting car and truck expenses.

Sources: Internal Revenue Service, Revenue Procedure 2008-66 (pdf), IR-2008-117, IR-2008-118, and IR-2008-131.

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