What are the New York State Individual Tax Law Changes for 2009?
Here are some of the more important New York State Individual Income Tax law changes for the tax year 2009 that high income taxpayers should be particularily awar, and these are shown below;
1. New York State tax rates revised
Based on the new rates, taxpayers may need to increase the amount of estimated tax paid for tax year 2009 if the taxpayers New York taxable income is:
•more than $300,000, and you are married filing jointly or a qualifying widow(er);
•more than $200,000, and you are single, married filing separately, or an estate or trust; or
•more than $250,000, and you are a head of household.
2.Itemized deduction limitation revised
If a taxpayers New York adjusted gross income is more than $1,000,000, then that taxpayers New York itemized deduction is now limited to 50% of their federal itemized deduction for charitable contributions. All other federal itemized deductions will be reduced to zero. Thus, that taxpayer may need to increase the amount of estimated tax paid for tax year 2009.
3.Penalty for underpayment of estimated tax revised
To avoid the penalty for underpayment of estimated tax for tax year 2009, the total amount of estimated tax and withholding tax for that taxpayer must be:
•at least 90% (66 2/3% for farmers and fishermen) of the amount of income tax due as shown on their return for 2009; or
•100% of the tax shown on their tax return for 2008 (110% of that amount if you are not a farmer or a fisherman and your New York adjusted gross income shown on that return is more than $150,000 or, if married filing separately for 2009, more than $75,000). To qualify for this provision, a taxpayer must have filed a return for 2008, and it must have been for a full 12-month year.
Taxpayers have until Januarly 15th, 2010 to make their 4th quarter NY State estimated tax payments. It is worth consulting your CPA or tax professional to determine whether or not you have met the NY minimum estimated tax payment requirements to avoid possible underpayment penalties.