10 Tax Changes for 2008
Uncle Sam never sleeps. Plan now to save on taxes for 2009.
1. More money for gas. Standard mileage deduction for business increases to 50.5 cents per mile. Add it up.
2. More money for retirement. You can contribute $5,000 to your IRA ($6,000 if you're over 50) in 2008.
3. No breaks for sales taxes. The provision permitting taxpayers to deduct sales taxes expired in 2007. <
4. More tax breaks for retirement savings. Married taxpayers with joint income up to $85,000 will be able to deduct IRA contributions if they file jointly; individuals up to $53,000.
5. Higher standard deduction. If you don’t itemize, you can deduct $10,900 as a married couple filing jointly in 2008 ($5,450 for singles).
6. No tax on some capital gains. Joint filers with taxable income less than $65,100 (single $32,550) don’t pay tax on capital gains in 2008. Everyone else pays 15%.
7. More time to sell a house when you lose a spouse. Taxpayers who lose a spouse have two years after that death to take the max exclusion of $500,000 in gain on the sale of a principal residence.
8. Less money back for some hybrid cars. Tax credits on some hybrids phased out in 2008. Check 2008 Model Year Hybrid List at www.irs.gov. Thank you Fed.
9. Tougher taxes for kids. Children 18 and under pay taxes at their parents rate for investment income. So take that trade account out of your baby’s name.
10. Higher cutoffs for Social Security. Max amount of earnings subject to Social Security increases to $102,000 in 2008.
Source: Realtor Magazine