NEW 2009 IRS Amounts for Standard Deduction, Transportation Fringes, and Earned Income Credit

The IRS has released inflation-adjusted tables for 2009 reflecting increases in the standard deduction and excludable transportation fringes, among other changes [Rev. Proc. 2008-66, 10-16-08].

Standard deduction. The standard deduction amounts for 2009 increase to $11,400 for married couples filing jointly or surviving spouses ($10,900 in 2008), $8,350 for heads of households ($8,000 in 2008), $5,700 for single taxpayers ($5,450 in 2008), and $5,700 for married taxpayers filing separately ($5,450 in 2008).

Transportation fringes. The amounts that may be excluded from gross income for employer-provided "qualified transportation fringe benefits" for 2009 are as follows: $120 per month for "transportation in a commuter highway vehicle and any transit pass" ($115 in 2008), and $230 per month for "qualified parking" ($220 in 2008).

Earned Income Credit. For 2009, the Earned Income Credit for employees with one qualifying (dependent) child is 34% of the first $8,950 of earned income, for a maximum of $3,043 ($2,917 in 2008). For employees with two or more qualifying children, the EIC is 40% of the first $12,570 of earned income, for a maximum of $5,028 ($4,824 in 2008), and for employees with no qualifying children, the EIC is 7.65% of $5,970, for a maximum of $457 ($438 in 2008). Married employees filing jointly who earn less than $38,583 in 2009 ($35,463 for single employees) and who have at least one qualifying child can receive advance payments of their EIC of up to $1,826 ($1,750 in 2008) spread out over their pay periods during the year.

Foreign earned income exclusion. For 2009, the maximum foreign earned income exclusion amount under IRC §911(b)(2)(D)(i) is $91,400 ($87,600 in 2008). The maximum foreign housing cost exclusion amount under IRC §911(c)(2) is $12,796 ($12,264 in 2008).

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