Estimated Inflation Adjustments for 2009
Posted 10/30/08
IRS has released inflation adjustments related to income, estate, and gift taxes (Revenue Procedure 2008-66)
Annual gift tax exclusion - increased from $12,000 to $13,000 in 2009.
Special Use Valuation - aggregate decrease in the value of qualified real property to which Special Use Valuation is applied (IRC Sec. 2032A) can't exceed $1.0 million, up from $960,000 in 2008.
Estate tax payable in installments - Amount used to determine the 2% portion of estate tax payable in installments is $1.33 million in 2009, increased from 1.28 million.
Income Tax Adjustments
Standard Deduction - Married filing jointly $11,400, Heads of households $8,350, Unmarried $5,700, and Married filing separately $5,700
Limitation on itemized deductions – The “applicable amount” of adjusted gross income above which otherwise allowable itemized deductions is reduced is $166,800, or $83,400 for married filing separately.
Personal Exemption - $3,650
Tax Brackets – Note that the ordinary income tax brackets below determine the 0% capital gains rate that applies to taxpayers in the 10% and 15% tax brackets.
Married Individuals Filing Joint Returns and Surviving Spouses| If Taxable Income Is | The Tax Is |
Not over $16,700 |
10% of taxable income |
Over $16,700 but not over $67,900 |
$1,670 plus 15% of amount over $16,700 |
Over $67,900 but not over $137,050 |
$9,350 plus 25% of excess over $67,900 |
Over $137,050 but not over $208,850 |
$26,637.50 plus 28% of the excess over $137,050 |
Over $208,850 but not over $372,950 |
$46,741 plus 33% of the excess over $208,850 |
Over $372,950 |
$100,894 plus 35% of the excess over $372,950 |
Heads of Households
| If Taxable Income Is | The Tax Is |
Not over $11,950 |
10% of taxable income |
Over $11,950 but not over $45,500 |
$1,195 plus 15% of amount over $11,950 |
Over $45,500 but not over $117,450 |
$6,227 plus 25% of excess over $45,500 |
Over $117,450 but not over $190,200 |
$24,215 plus 28% of the excess over $117,450 |
Over $190,200 but not over $372,950 |
$44,585 plus 33% of the excess over $190,200 |
Over $372,950 |
$104,892.50 plus 35% of the excess over $372,950 |
Unmarried Individuals (other than Surviving Spouses and Heads of Households)
| If Taxable Income Is | The Tax Is |
Not over $8,350 |
10% of taxable income |
Over $8,350 but not over $33,950 |
$835 plus 15% of amount over $8,350 |
Over $33,950 but not over $82,250 |
$4,675 plus 25% of excess over $33,950 |
Over $82,250 but not over $171,550 |
$16,750 plus 28% of the excess over $82,250 |
Over $171,550 but not over $372,950 |
$41,754 plus 33% of the excess over $171,550 |
Over $372,950 |
$108,216 plus 35% of the excess over $372,950 |
Married Individuals Filing Separate Returns
| If Taxable Income Is | The Tax Is |
Not over $8,350 |
10% of taxable income |
Over $8,350 but not over $33,950 |
$835 plus 15% of amount over $8,350 |
Over $33,950 but not over $68,525 |
$4,675 plus 25% of excess over $33,950 |
Over $68,525 but not over $104,425 |
$13,318.75 plus 28% of the excess over $68,525 |
Over $104,425 but not over $186,475 |
$23,370.75 plus 33% of the excess over $104,425 |
Over $186,475 |
$50,447.25 plus 35% of the excess over $186,475 |
Estates and Trusts
| If Taxable Income Is | The Tax Is |
Not over $2,300 |
15% of taxable income |
Over $2,300 but not over $5,350 |
$345 plus 25% of amount over $2,300 |
Over $5,350 but not over $8,200 |
$1,107.50 plus 28% of excess over $5,350 |
Over $8,200 but not over $11,150 |
$1,950.50 plus 33% of the excess over $8,200 |
Over $11,150 |
$2,879 plus 35% of the excess over $11,150 |