Mei-Feng Moe, EA
Mei-Feng Moe (May) is a
Master Tax Advisor certified by
H&R Block. In addition to
giving tax advice and preparing
income tax returns, she has also
been teaching income tax
courses for a number of years.
She is an Enrolled Agent who
may represent clients before
the IRS. She also holds series 6
and series 63 security licenses.
Tax season 2009
What’s new for Wisconsin?
Your Master Tax Advisor/Mei-Feng Moe

Federal Stimulus Rebate
Wisconsin is not taxing the rebate payment because the IRS does not
consider it as taxable income.

Social Security Benefits
Starting in 2008, social security benefits are not taxable to Wisconsin.  
Taxpayers who have to report part of their social security benefits as taxable
income on federal return may subtract the entire taxable amount when
computing Wisconsin income.

Medical Care Insurance Subtraction
Medical care insurance subtraction for taxpayers who had no employer and
were not self-employed in 2008 is increased to 66.7 percent. (The deduction
will be 100 percent starting in 2009.)  
This subtraction is also expanded to taxpayers whose employer does pay a
portion of their medical care insurance premium. Originally scheduled to
begin in 2009, these employees may now deduct 10 percent of medical care
insurance paid in 2008. The deduction for 2009 is scheduled to be 25
percent; for 2010 is 45 percent. After 2010, the deduction is 100 percent.

Tuition and Fee Expenses Subtraction
The deduction of tuition and mandatory student fees has been increased to
$5,114 per student.

Section 179 Expense for Farmers
Farmers may be able to claim up to $115,000 under Section 179 expense
deduction. Phase-out begins at $460,000. Schedule I adjustment is required
because federal allows up to $250,000 and phase-out begins at $800,000.
(Reminder: Wis. Sec. 179 deduction for taxpayers other than farmers remains
the same at $25,000, phase-out begins at $200,000. Wisconsin also
continues to disallow federal bonus depreciation.)

Interest and Rental Expenses
Paid to Related Entities
Interest and rental expenses paid, accrued, or incurred to a related party must
be added back to Wis. income. If the expenses are eligible for Wis. deduction,
the eligible amount may be subtracted. If the eligible expenses are $100,000
or more, a new schedule RT is required and a special code 16 must be
entered on Form 1 in the Special Conditions box. If the eligible deduction is
under $100,000, no schedule RT is required to be filed with Wisconsin return.

Farmland Tax Relief Credit
The percentage rate for the Farmland Tax Relief Credit was lowered to 19
percent. The maximum allowable credit stays the same at $1,500, based on
19 percent of the first $7,895 property tax.

Estimated Tax Payments Verification
A new application on the WDOR website, www.revenue.wi.gov, allows you to
verify estimated tax payments, so that the correct total payment can be entered
on the tax return.  

Something to look forward to
Starting in 2009, up to $5,000 of retirement income may be exempt from
Wisconsin taxation for taxpayers with lower income who are 65 or over.
The Veterans and Surviving Spouses Property Tax Credit was revised to
include Wisconsin residents of any consecutive five years after entry into
active service, effective 2009. The age requirement of 65 has also been
removed.

Also starting in 2009, up to $750 child care expenses may be deducted from
Wisconsin income. The deduction is up to $1,500 if you have two or more
qualifying children.