As you prepare for the upcoming tax year, I thought you might find this brief rundown of 2008 tax changes useful.
* ADOPTION TAX CREDIT increases to $11,650 for adoption of an eligible child.
* SECTION 179 maximum deduction increases to $128,000. Phase-out threshold increases to $510,000.
* STANDARD MILEAGE RATE for business driving increases to 50.5¢ a mile. Rate for medical and moving mileage decreases to 19¢ a mile. Rate for charitable driving remains at 14¢ a mile.
* ESTATE TAX top rate remains at 45%, and the exemption amount remains at $2 million. The ANNUAL GIFT TAX EXCLUSION remains at $12,000.
* 401(k) maximum salary deferral remains at $15,500 ($20,500 for 50 and older).
* SIMPLE maximum salary deferral remains at $10,500 ($13,000 for 50 and older).
* IRA contribution limit increases to $5,000 ($6,000 for 50 and older).
* KIDDIE TAX threshold increases to $1,800 and now applies up to age 19 (up to age 24 for full-time students).
* NANNY TAX threshold increases to $1,600.
* TRANSPORTATION FRINGE BENEFIT limit increases to $115 for vehicle/transit passes and to $220 for qualified parking.
* SOCIAL SECURITY taxable wage limit increases to $102,000. Retirees under age 65 can earn up to $13,560 without losing benefits.
* HOPE CREDIT maximum increases to $1,800.
* HSA CONTRIBUTION limit increases to $2,900 for individuals and to $5,800 for families. An additional $900 may be contributed by those 55 or older.
Thanks to the last-minute passage in 2007 of AMT patch legislation, the AMT exemption amounts for 2007 are $66,250 for joint filers, $33,125 for couples filing separately, and $44,350 for single taxpayers and heads of household.
For Tax Relief & Tax Resolution help CLICK HERE. Mike Habib, EA www.MyIRSTaxRelief.com