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Limit on exclusion of gain on sale of main • A child did not live with you and you Expiring tax benefits. The following bene- home. In certain cases, gain from the sale earned less than $13,460 ($18,470 if mar- fits are scheduled to expire and will not be of your main home is no longer excludable ried filing jointly). available for 2010. from income if it is allocable to periods af- • Deduction for educator expenses in The maximum AGI you can have and ter 2008 when neither you nor your spouse figuring AGI. still get the credit also has increased. You (or your former spouse) used the property • Tuition and fees deduction in figuring may be able to take the credit if your AGI is as a main home. See Pub. 523. AGI. less than the amount in the above list that applies to you. The maximum investment Electric vehicle credits. You may be able • Increased standard deduction for real income you can have and still get the credit to take a credit for: estate taxes or net disaster loss. is still $3,100. • A plug-in electric drive motor vehicle • Itemized deduction or increased stan- placed in service in 2009 (see Form 8936), dard deduction for state or local sales or ex- IRA deduction expanded. You may be cise taxes on the purchase of a new motor • A plug-in electric vehicle bought after able to take an IRA deduction if you were vehicle. February 17, 2009 (see Form 8834), or covered by a retirement plan and your 2010 modified AGI is less than $66,000 • Deduction for state and local sales • Conversion of a vehicle to a plug-in ($109,000 if married filing jointly or quali- taxes. electric drive motor vehicle placed in serv- fying widow(er)). If your spouse was cov- ice after February 17, 2009 (see Form • The exclusion from income of up to ered by a retirement plan, but you were not, 8910). $2,400 in unemployment compensation. you may be able to take an IRA deduction • The exclusion from income of quali- Certain tax benefits for Midwestern if your 2010 modified AGI is less than fied charitable distributions. disaster areas expired. Certain tax benefits $177,000. • Government retiree credit. for Midwestern disaster areas have expired, Recapture of first-time homebuyer credit. including special charitable contribution • District of Columbia first-time If you claimed the first-time homebuyer rules and the election to use your 2007 homebuyer credit (for homes purchased af- credit for a home you bought in 2008, you earned income to figure your 2008 EIC and ter 2009). generally must begin repaying it in 2010. additional child tax credit. See Pub. • Extra $3,000 IRA deduction for em- See Form 5405 for details. 4492-B. ployees of bankrupt companies. Roth IRAs. Half of any income that results • Certain tax benefits for Midwestern Recovery rebate credit expired. This from a rollover or conversion to a Roth IRA disaster areas, including the additional ex- credit has expired and does not apply for from another retirement plan in 2010 is in- emption amount if you provided housing 2009. cluded in income in 2011, and the other for a person displaced by the Midwestern Mailing your return. You may be mailing half in 2012, unless you elect to include all storms, tornadoes, or flooding. your return to a different address this year of it in 2010. In addition, for any tax year Personal exemption and itemized because the IRS has changed the filing lo- beginning after 2009, you can make a qual- deduction phaseouts ended. For 2010, tax- cation for several areas. If you received an ified rollover contribution to a Roth IRA payers with AGI above a certain amount envelope with your tax package, please use regardless of the amount of your modified will no longer lose part of their deduction it. Otherwise, see Where Do You File? on AGI. for personal exemptions and itemized de- the back cover. Alternative minimum tax (AMT) ductions. exemption amount. The AMT exemption Allowance of certain personal credits amount is scheduled to decrease to $33,750 against the AMT. The allowance of the What’s New for 2010 ($45,000 if married filing jointly or a quali- following personal credits against the AMT fying widow(er); $22,500 if married filing Earned income credit (EIC). You may be has expired. separately). able to take the EIC if: • Credit for child and dependent care Domestic production activities income. • Three or more children lived with you expenses. The percentage rate for 2010 increases to and you earned less than $43,352 ($48,362 • Credit for the elderly or the disabled. 9%. However, the deduction is reduced if if married filing jointly), • Lifetime learning credit. you have oil-related qualified production • Two children lived with you and you activities income. • Mortgage interest credit. earned less than $40,363 ($45,373 if mar- ried filing jointly), • Credit for nonbusiness energy prop- Personal casualty and theft loss limit re- erty. • One child lived with you and you duced. Each personal casualty or theft loss earned less than $35,535 ($40,545 if mar- is limited to the excess of the loss over • District of Columbia first-time ried filing jointly), or $100 (instead of $500). homebuyer credit. These rules apply to all U.S. citizens, regardless of where they live, and resident aliens. Filing Have you tried IRS e-file? It’s the fastest way to get your refund and it’s free if you are eligible. Visit www.irs.gov for details. Requirements Even if you do not otherwise • Refundable American opportunity have to file a return, you should credit. Do You Have To File? file one to get a refund of any • First-time homebuyer credit. TIP Use Chart A, B, or C to see if you must file federal income tax withheld. • Refundable credit for prior year a return. U.S. citizens who lived in or had You should also file if you are eligible for minimum tax. income from a U.S. possession should see any of the following credits. • Health coverage tax credit. Pub. 570. Residents of Puerto Rico can use • Making work pay credit. TeleTax topic 901 (see page 94) to see if Exception for certain children under age • Government retiree credit. they must file. 19 or full-time students. If certain condi- • Earned income credit. tions apply, you can elect to include on • Additional child tax credit. your return the income of a child who was - 7 -