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taxmap/pubs/p554-000.htm#en_us_publink100043503
Publication 554

 
Tax Guide 
for Seniors


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What's New(p1)


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Economic recovery payment.(p1)

Any economic recovery payment you received is not taxable for federal income tax purposes, but it reduces any making work pay credit or government retiree credit.
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Making work pay credit.(p1)

If you have earned income from work, you may be able to take this credit. It is 6.2% of your earned income but cannot be more than $400 ($800 if married filing jointly). For details, get Schedule M (Form 1040A or 1040), Making Work Pay and Government Retiree Credit.
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Government retiree credit.(p1)

You may be able to take this credit if you get a government pension or annuity, but it reduces any making work pay credit. For details, get Schedule M.
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Unemployment compensation.(p2)

You do not have to pay tax on unemployment compensation up to $2,400 per person for the year. Amounts over $2,400 are still taxable. See the discussion under Compensation for Services, later.
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First-time homebuyer credit.(p2)

The credit increases to as much as $8,000 ($4,000 if married filing separately) for homes bought after 2008 and before May 1, 2010 (before July 1, 2010, if you entered into a binding contract before May 1, 2010). If you bought the home after November 6, 2009, you may be able to claim the credit even if you already owned a home, but, in that case, the maximum credit is $6,500 ($3,250 if married filing separately). For details get Form 5405, First-Time Homebuyer Credit and Repayment of the Credit.
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American opportunity credit.(p2)

The maximum Hope education credit is increased to $2,500. The increased credit has been renamed the American opportunity credit and part of it is refundable. For details, get Form 8863, Education Credits.
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Alternative minimum tax (AMT) exemption amount increased.(p2)

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). For details, get Form 6251, Alternative Minimum Tax-Individuals.
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Standard deduction increased.(p2)

For most people who do not itemize their deductions, the standard deduction is higher in 2009 than it was in 2008. In addition to the annual increase due to inflation adjustments, your 2009 standard deduction is increased by:
For more information, see chapter 4.
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Required minimum distribution (RMD) waived.(p2)

For 2009, you are not required to take an RMD from your IRA or most defined contribution plans.
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Earned income credit.(p2)

The maximum amount of income you can earn and still get the credit has increased. You may be able to take the credit if you earn less than: For more information, see Earned Income Credit, later.
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Exemption phaseout.(p2)

You lose part of the benefit of your exemptions if your adjusted gross income is above a certain amount. For 2009, the phaseout begins at $125,100 for married persons filing separately; $166,800 for single individuals; $208,500 for heads of household; and $250,200 for married persons filing jointly or qualifying widow(ers). However, in 2009, you can lose no more than 1/3 of the amount of your exemptions. In other words, each exemption cannot be reduced to less than $2,433. For more information, see Phaseout of Exemptions in Publication 501, Exemptions, Standard Deduction, and Filing Information.

Reminders(p2)


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Tax return preparers.(p2)

Choose your preparer carefully. If you pay someone to prepare your return, the preparer is required, under the law, to sign the return and fill in the other blanks in the Paid Preparer's area of your return. Remember, however, that you are still responsible for the accuracy of every item entered on your return. If there is any underpayment, you are responsible for paying it, plus any interest and penalty that may be due.
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Hurricane and disaster-related tax relief.(p2)

Special rules apply to the use of retirement funds (including IRAs) by qualified individuals who suffered an economic loss as a result of: See Publication 575, Pension and Annuity Income, and Publication 590, Individual Retirement Arrangements (IRAs), for information on these special rules.
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Sale of home by surviving spouse.(p2)

If you are an unmarried widow or widower, you may qualify to exclude up to $500,000 of any gain from the sale or exchange of your main home. For more information, see Sale of Home, later.
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Third party designee.(p2)

You can check the "Yes" box in the Third Party Designee area of your return to authorize the IRS to discuss your return with your preparer, a friend, family member, or any other person you choose. This allows the IRS to call the person you identified as your designee to answer any questions that may arise during the processing of your return. It also allows your designee to perform certain actions. See your income tax package for details.
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Employment tax withholding.(p3)

Your wages are subject to withholding for income tax, social security tax, and Medicare tax even if you are receiving social security benefits.
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Photographs of missing children.(p3)

The Internal Revenue Service is a proud partner with the National Center for Missing and Exploited Children. Photographs of missing children selected by the Center may appear in this publication on pages that would otherwise be blank. You can help bring these children home by looking at the photographs and calling 1-800-THE-LOST (1-800-843-5678) if you recognize a child.

taxmap/pubs/p554-000.htm#TXMP4394cbbdIntroduction

The purpose of this publication is to provide a general overview of selected topics that are of interest to older taxpayers. The publication will help you determine if you need to file a return and, if so, what items to report on your return. Each topic is discussed only briefly, so you will find references to other free IRS publications that provide more detail on these topics if you need it.
Table I has a list of questions you may have about filing your federal tax return. To the right of each question is the location of the answer in this publication. Also, at the back of this publication there is an index to help you search for the topic you need.
While most federal income tax laws apply equally to all taxpayers, regardless of age, there are some provisions that give special treatment to older taxpayers. The following are some examples.
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Return preparation assistance.(p4)


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The IRS wants to make it easier for you to file your federal tax return. You may find it helpful to visit a Volunteer Income Tax Assistance (VITA), Tax Counseling for the Elderly (TCE), or American Association of Retired Persons (AARP) Tax-Aide site near you.
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Volunteer Income Tax Assistance and Tax Counseling for the Elderly.(p4)
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These programs provide free help for low-income taxpayers and taxpayers age 60 or older to fill in and file their returns. For the VITA/TCE site nearest you, contact your local IRS office.
For the location of an AARP Tax-Aide site in your community, call 1-888-227-7669. When asked, be ready to press in or speak your 5-digit ZIP code. Or, you can visit their website on the Internet at www.aarp.org/taxaide.
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Comments and suggestions.(p4)


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We welcome your comments about this publication and your suggestions for future editions.
You can write to us at the following address:

Internal Revenue Service 
Individual Forms and Publications Branch 
SE:W:CAR:MP:T:I 
1111 Constitution Ave. NW, IR-6526 
Washington, DC 20224


We respond to many letters by telephone. Therefore, it would be helpful if you would include your daytime phone number, including the area code, in your correspondence.
You can email us at *taxforms@irs.gov. (The asterisk must be included in the address.) Please put "Publications Comment" on the subject line. Although we cannot respond individually to each email, we do appreciate your feedback and will consider your comments as we revise our tax products.
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Ordering forms and publications.(p4)
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Visit www.irs.gov/formspubs to download forms and publications, call 1-800-829-3676, or write to the address below and receive a response within 10 days after your request is received.

Internal Revenue Service 
1201 N. Mitsubishi Motorway 
Bloomington, IL 61705-6613


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Tax questions.(p4)
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If you have a tax question, check the information available on www.irs.gov or call 1-800-829-1040. We cannot answer tax questions sent to either of the above addresses.
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Table I. What You Should Know About Federal Taxes

Note. The following is a list of questions you may have about filling out your federal income tax return.
To the right of each question is the location of the answer in this publication.

What I Should Know Where To Find the Answer
Do I need to file a return?See chapter 1.
Is my income taxable or nontaxable?

If it is nontaxable, must I still report it?
See chapter 2.
How do I report benefits I received from the Social Security Administration or the Railroad Retirement Board?

Are these benefits taxable?
See Social Security and Equivalent Railroad Retirement Benefits in chapter 2.
Must I report the sale of my home?

If I had a gain, is any part of it taxable?
See Sale of Home in chapter 2.
What are some of the items that I can deduct to reduce my income?See chapters 3 and 4.
How do I report the amounts I set aside for my IRA?See Individual Retirement Arrangement (IRA) Contributions and Deductions in chapter 3.
Would it be better for me to claim the standard deduction or itemize my deductions?See chapter 4.
What are some of the credits I can claim to reduce my tax?See chapter 5 for discussions on the credit for the elderly or the disabled, the child and dependent care credit, and the earned income credit.
Must I make estimated tax payments?See chapter 6.
How do I contact the IRS or get more information?See chapter 7.