The standard mileage rate for 2010 is $.50 per mile.

Beginning in 2011, the capital gains rates are scheduled to increase from 15% to 20% for those taxpayers in the 25% and above tax brackets, and increase from 0% to 10% for those taxpayers in the 10% and 15 % tax brackets.

Small businesses are allowed to take the 50% first-year bonus depreciation for qualifying property placed in service in 2009. Also during 2009, small businesses can elect to expense up to $250,000 of the cost of qualifying property under Code Section 179.

The American Recovery and Reinvestment Act of 2009 expands tax breaks for individuals seeking a college education. For 2009 and 2010, it gives taxpayers a new “American Opportunity” tax credit of up to $2,500 of the cost of tuition and related expenses paid during the tax year. You receive a tax credit based on 100% of the first $2,000 of tuition and related expenses (including books) paid during the tax year and 25% of the next $2,000 of tuition and related expenses paid during the tax year. The credit is available for the first four years of post-secondary education in a degree or certificate program. Forty percent of the credit is refundable. The credit is phased out for taxpayers with modified AGI between $80,000 and $90,000 ($160,000 and $180,000 for joint filers).

Section 529 Education Plans are tax-advantaged savings plans that can be used to pay qualified education expenses, including: tuition, room & board, mandatory fees and books. Under the Recovery Act, for 2009 and 2010, qualified education expenses under these plans include computer technology and equipment, as well as Internet access and related services.

Alternative minimum tax (AMT) will hit many more taxpayers. The AMT exemption amount for 2010 is $33,750 ($45,000 if married filing jointly or a qualifying widow(er); $22,500 if married filing separately). The AMT exemption amount for 2009 was $46,700 ($70,950 if married filing jointly or a qualifying widow(er), $35,475 if married filing separately).

Many personal nonrefundable credits are allowed only to the extent that their aggregate amount doesn't exceed the excess of: (a) the taxpayer's regular tax liability, over (b) his tentative minimum tax, determined without regard to the AMT tax foreign tax credit.

The above rule doesn't apply to the adoption credit, the child tax credit, the low-income saver's credit, the residential energy efficient property, the American Opportunity (education) tax credit, qualified plug-in electric drive motor vehicle credit, foreign tax credit, the nondepreciable property portion of the alternate motor vehicle credit; and the qualified plug-in electric vehicle credit.

For 2009, personal nonrefundable credits could offset the alternative minimum tax.

Required minimum distributions (RMDs) return. RMDs must be made for calendar year 2010 from IRAs and employer-provided qualified retirement plans that are defined contribution plans. RMDs for calendar year 2009 were waived.

Conversions to Roth IRAs OK regardless of income. For tax years beginning after 2009, the rule that barred taxpayers with more than $100,000 of modified AGI from converting traditional IRAs to Roth IRAs is eliminated. Additionally, married taxpayers filing a separate return may convert amounts in a traditional IRA into a Roth IRA (before 2010 they were barred from doing so). Additionally, for such conversions made in 2010, any amounts that would be included as income as a result of the conversion will be included in income in equal amounts in 2011 and 2012, unless the taxpayer elects to include the entire amount in income in 2010.

AGI-based personal exemption phaseout and itemized deduction reduction are gone. For 2010, taxpayers with higher levels of AGI will no longer face a phaseout of their deduction for personal exemptions or a reduction in their itemized deductions. For 2009, the personal exemption phaseout began when AGI exceeded these threshold amounts: $250,200 (joint return or surviving spouse), $208,500 (head of household), $166,800 (single) and $125,100 (married filing separately). And the itemized deduction reduction began when AGI exceeded $166,800 ($83,400 for married filing separately).

Recapture of first-time homebuyer credit. Taxpayers who claimed a Code Sec. 36 first-time homebuyer credit (FTHTC) for homes bought after Apr. 8, 2008 and before Jan. 1, 2009, must begin repaying the credit in 2010. The FTHTC must generally be recaptured (i.e., repaid) in equal installments over a 15-year period. Recapture is accelerated if a taxpayer disposes of his residence or it ceases to be his and his spouse's principal residence before the end of the 15-year recapture period.

New modified carryover basis regime. As part of the estate tax repeal that applies for individuals dying in 2010, the income tax basis rules for property acquired from a decedent in 2010 are similar to the gift tax carryover basis rules but with many opportunities for heirs to get increases in basis. For example, it is possible to increase the basis of assets received from an individual dying in 2010 by $1.3 million and by an additional $3 million for assets going to a spouse. The step-up in basis rules return for 2011.

Eased casualty loss rules return. In general, personal casualty or theft losses for the tax year generally are allowable only if they exceed a dollar limitation per casualty or theft. In addition, aggregate net casualty and theft losses generally may be claimed as an itemized deduction only to the extent they exceed 10% of an individual's adjusted gross income (AGI). For 2010, the dollar limitation per casualty or theft is $100; it had been $500 for 2009.