Alternative Minimum Tax (AMT) exemption amount increased

The AMT exemption amount increased to $46,700 (70,950 if married filing jointly or a qualifying widow (er) $35,475 if married filing separately.

Children who are 18 years old or a full time student and under age 24 with unearned income in excess of $1,900 is taxed at the parent's rate.

Catch-up Pension Contributions

If you getting close to retirement you may want to consider increasing your pension contribution. Taxpayers who are at least 50 years of age may make additional catch up Individual Retirement Account and 401(k) contributions.

Estimated Tax Payments

Effective 2009. The safe harbor percentage used to avoid the estimated tax penalty is reduced to 90% of the tax shown on the 2008 return for qualified individuals if:

AGI for 2008 is less than $500,000 and

More than 50% of gross income shown on the 2008 tax return was income from a small business.

Electric Vehicle Credits

Effective 2009.New electric vehicle credits are allowed for the following:

A plug-in electric drive motor vehicle placed in service in 2009(see F8936).

A plug - in vehicle bought after February 17,2009(see Form 8834)

First-Time Homebuyer Credit

Effective November 7, 2009. The credit is the smaller of 10% of the purchase price of $8,000, or $6,500 for certain long time residents treated as a first time homebuyer if the home is purchased before July 1, 2010 and a written binding contract is signed befoer May 1, 2010. AGI phase-out amounts are increased. A new $800,000 limit applies to the home purchase price. The buyer must be 18 or older and cannot be a dependent of another taxpayer.