New laws may mean lower taxes for 2009.
by Richard R. Hammar
Congress enacted new tax laws in 2009 that include provisions of direct relevance to churches and church employees. Many of these changes may result in lower taxes. Tax laws enacted in prior years also contain provisions that took effect in 2009 or 2010. Also, a number of court decisions and IRS rulings provided clarification of many important tax issues. This article summarizes and clarifies 57 of the most important changes.
Part 1: Clergy and Lay Church Employees
A. Miscellaneous Tax Law Changes
1. Revoking an exemption from Social Security
Will Congress give ministers another opportunity to revoke an exemption from Social Security? It does not seem likely, at least for now. No bills were introduced in Congress in 2009 that would have authorized ministers to revoke an exemption from Social Security.
2. 2009 Inflation Adjustments
More than three dozen tax benefits, affecting virtually every taxpayer, were adjusted for 2009. Key changes affecting 2009 returns include the following:
- The value of each personal and dependency exemption, available to most taxpayers, is $3,650, up $150 from 2008.
- The new standard deduction is $11,400 for married couples filing a joint return (up $500), $5,700 for singles and married individuals filing separately (up $250). 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.
- Tax-bracket thresholds increase for each filing status. For a married couple filing a joint return, for example, the taxable-income threshold separating the 15-percent bracket from the 25-percent bracket is $67,900, up from $65,100 in 2008.