1 Residential Energy Credits Extension & modification of credit Nonbusiness energy property: Form 5695, Part I Amount of credit increases from 10% to 30% Credit limited to $1,500 for the total of all 2009 and 2010 purchases Credit expanded to include certain asphalt roofs and stoves that burn biomass fuel Definition of qualifying property revised, primarily to update energy efficiency requirements

2 Residential Energy Credits Modification of credit for Residential energy efficient property : Form 5695, Part II Credit for qualified solar hot water property and geothermal heat pumps no longer limited to $2,000 per year Credit for qualified small wind energy property no longer limited to the smaller of $500 for each half kilowatt of capacity or $4,000

3 Overview of 2009 Income Tax Law Changes New for Tax Year 2009

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6 Increased Standard Deduction for Real Property Taxes For 2009, the standard deduction is increased by amount of otherwise deductible real estate taxes up to $500 ($1,000 if married filing jointly) Use Sch L, Standard Deduction for Certain Filers

7 Changes to Schedule K-1s Limited flow through income items from Schedule K-1s (Form 1041, 1065 &1120S) in-scope as Advanced Topic

8 Changes to Schedule K-1s Interest Income (Sch B) Dividend Income (Sch B) Net short and long term Capital Gains (Sch D) Tax-Exempt Interest (Form 1040, Line 8b)

9 Definition of Qualifying Child  Your qualifying child must be younger than you (unless the child is permanently and totally disabled)  Child cannot file a joint return unless filed only as claim for refund  If parent of a child can claim the child as a qualifying child, but no parent so claims the child, no one else can claim child as a qualifying child unless that person’s AGI is higher than the highest AGI of any parent of the child  Your child is a qualifying child for child tax credit only if you can and do claim an exemption for him or her

10 New Rules for Children of Divorced or Separated Parents Revocation is effective no earlier than the tax year beginning in the calendar year in which the custodial parent provided the non-custodial parent with written notice