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For the latest information on the IRS website, visit http://www.irs.gov 

Making Work Pay Credit
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). See Schedule M.

Government Retiree Credit
You may be able to take this credit if you get a government pension or annuity, but it reduces any making work pay credit. The credit is $250 ($500 if married filing jointly and both you and your spouse received a qualifying pension or annuity). You cannot take this credit if you received a $250 economic recovery payment in 2009. If you file a joint return, both you and your spouse received a qualifying person or annuity, and both of you received an economic recovery payment in 2009, no government retiree credit is allowed. If only one of you received an economic recovery payment in 2009, the credit is $250).

Cash for Clunkers
A $3,500 or $4,500 voucher or payment made for such a voucher under the CARS program to buy or lease a new fuel-efficient automobile is not taxable for federal income tax purposes.

Unemployment Compensation
You do not have to pay tax on unemployment compensation of up to $2,400 per recipient. Amounts over $2,400 are still taxable.

Deduction for Motor Vehicle Taxes
If you bought a new motor vehicle after February 16, 2009, you may be able to deduct any state or local excise taxes on the purchase. For more information, click here.

Economic Stimulus Payment
Any economic stimulus payment you received is not taxable for federal income tax purposes but reduces your recovery rebate credit.

Recovery rebate credit
This credit has expired and does not apply for 2009.

Withdrawal of economic stimulus payment from certain accounts.
If your economic stimulus payment was directly deposited to a tax-favored account and you withdraw the payment by the due date of your return (including extensions), the amount withdrawn will not be taxed and no additional tax or penalty will apply. For a Coverdell education savings account, the withdrawal can be made by the later of the above date or June 1, 2009. For more information , click here.

Alternative Minimum Tax
The following changes to the AMT went into effect for 2009.

AMT exemption amount increased. The AMT exemption amount has increased to $47,000 ($70,950 if married filing jointly or qualifying widow(er); $35,475 if married filing separately).

First-time home buyer credit. If you bought a main home after 2008, and before May 1, 2010, and did not own a main home during the prior 3 years, you may be able to take this credit. For more information, click here.

IRA deductions  expanded.
You and your spouse, if filing jointly, each may be able to deduct up to $5,000 ($6,000 if age 50 or older at the end of the year). For more information go to http://www.irs.gov/pub/irs-pdf/i1040.pdf.

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Earned Income Credit Amounts Increase
The following paragraphs explain the changes to the credit for 2009.

Amount of credit increased. The maximum amount of the credit has increased. The most you can get is:

• $3043 if you have one qualifying child,
• $5028 if you have two qualifying children,
• $5657 if you have three qualifying children, or
• $457 if you do not have a qualifying child.

Earned income amount increased. The maximum amount of income you can earn and still get the credit has increased for 2009. You may be able to take the credit if:

• You have three or more qualifying children and you earn less than $43,279 ($48,279 if married filing jointly),
• You have two qualifying children and you earn less than $40,295 ($45,295 if married filing jointly),
  
• You have one qualifying child and you earn less than $35,463 ($40,463 if married filing jointly), or
• You do not have a qualifying child and you earn less than $13,440 ($18,440 if married filing jointly).

The maximum amount of adjusted gross income (AGI) you can have and still get the credit also has increased. You may be able to take the credit if your AGI is less than the amount in the above list that applies to you.

Investment income amount increased. The maximum amount of investment income you can have and still get the credit has increased to $3,100 for 2009.

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Credit for non business energy property expired.
The credit for non business energy property has expired and does not apply for 2009. Form 5695 is now used only to claim the residential energy efficient property credit.

Tax on child’s investment income.
Form 8615 is required to figure the tax for a child with investment income of more than $1,900 if the child:

1. Was under age 18 at the end of 2009,
2. Was age 18 at the end of 2009 and did not have earned income that was more than half of the child’s support, or
3. Was a full-time student over age 18 and under age 24 at the end of 2008 and did not have earned income that was more than half of the child’s support.

The election to report a child’s investment income on a parent’s return and the special rule for when a child must file Form 6251 also now apply to the children listed above.

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Standard Mileage Rates
Business-related mileage. For 2009, the standard mileage rate for the cost of operating your car for business use is 55 cents per mile.

Car expenses and use of the standard mileage rate are explained in chapter 4 of Publication 463, Travel, Entertainment, Gift, andCar Expenses

Medical- and move-related mileage. For 2009, the standard mileage rate for the cost of operating your car for medical reasons or as part of a deductible move is 24 cents per mile . See Transportation under What Medical Expenses Are Includible in Publication 502 or Travel by car under Deductible Moving Expenses in Publication521