Before you begin preparing your 2010 tax return, make a note of the tax changes that recently went into effect:
The deduction for each Personal Exemption is $3,650.
The Standard Deduction is:
• $ 5,700 for Single
• $11,400 for Married Filing Joint and Qualifying Widow(er)
• $ 8,400 for Head of Household
• $ 5,700 for Married Filing Separate
The additional amounts for age 65 or older and/or blind are:
• $1,400 for Single and Head of Household
• $1,100 for Married (Joint and Separate) and Qualifying Widow(er)
The Standard Deduction for a dependent is the greater of either $950 or $300, plus the dependent's earned income, which should not exceed $5,700 (plus $1,400 if the taxpayer is 65 or blind).
The maximum amount you can contribute to a traditional or Roth IRA is $5,000, or $6,000 if you are age 50 or older.
The deduction for an IRA contribution made by a taxpayer who is an active participant in an employer plan is phased-out for singles with Adjusted Gross Income (AGI) between $56,000 and $66,000, or AGIs from $89,000 to $109,000 for married couples filing a joint return.
If only one spouse is an active participant in an employer plan, then the deduction for a contribution by the other spouse is phased-out on a joint return if the couple’s AGI is between $167,000 and $177,000.
The amount you can contribute to a Roth IRA is phased-out for a single filer if the AGI is between $105,000 and $120,000, or between $167,000 and $177,000 on a joint return.
—For the best rates on loans, bank accounts and credit cards, enter your ZIP code at BankingMyWay.com.