2008 Tax Law Changes

If you are preparing your own 2008 taxes, there are some changes in the tax law in 2008 that you should be aware of, because the changes will affect your taxes. The IRS recently published 2008 tax law changes, among them the following are more common to taxpayers:

  • Economic stimulus payment: The economic stimulus payment is NOT taxable;
  • Standard deduction increase: For 2008 tax year, married couple filing jointly will get $200 more in standard deduction over 2007, while single will get a $100 increase;
  • First time homebuyer credit: If you bought your first house after April 9, 2008, you will receive up to $7,500 credit. The credit, however, is only good till June 30, 2009;
  • Retirement account contribution limits: The AGI (adjusted gross income) phase out range for Roth IRA for married couple filing jointly is from $159,000 to $169,000; for singles, it is from $101,000 to $116,000;
  • Exemption: The personal and dependency exemption for 2008 is $3,500, $100 than 2007;
  • Dividend taxes: 0% dividend taxes for married filing jointly with $65,100 taxable income and singles with $32,550;
  • Kiddie tax: Investment income greater than $1,800 is taxable if the child is under 18.

The IRS publication also includes changes in AMT exemption, mileage rates adjustments, earned income tax credit, and self-employment taxes. Check out the publication for more details on these tax law changes.

Of course, if you are using a tax preparation software, such as TurboTax or TaxCut, to file your taxes, then you don’t have to worry about these changes yourself, because the software will take care of them for your. Speaking of tax software, do you already have one for this year? If not, you can enter to win a copy of TuboTax Deluxe or TaxCut Premium 2008.

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