Your 2008 Income Tax.
There is new tax information out on the 2008 tax season. Most of the changes will only have a slight impact on the basic corporate worker filing. As with most years numbers are adjusted upwards for inflation. Standard Deductions increased $100 for single filers which will secure about a $25 benefit for you in the 25% tax bracket ($32,550-$78,850 AGI).
The more interesting fact that this WSJ article highlights is the sunseting provisions of the AMT. Tom Herman says.
“The AMT, whose origins date to the late 1960s, is a separate way to calculate taxes with many rules that differ from those of the regular system. Temporarily higher AMT exclusion amounts expired at the end of last year. Unless Congress changes the law, about 25 million people will be hit by the AMT for 2007, up from about four million in 2006, a Treasury spokesman estimates.”
For anyone unsure what the AMT (Alternitive Minimum Tax) is, it was an initiative by congress to insure everyone (the rich) pays at least a little tax. The more money you make the easier it is to take tax deductions and credits, AMT takes this into consideration. The AMT is a parallel tax system that calculates your tax without taking into effect certian Tax items the normal code incorporates. A few of the denied deductions and exemptions for individuals are: Interest from Municiple Private Activity Bonds are taxable, different depreciation methods for assets required by AMT can increase capital gains, and increased floor on Medical Deduction limits your deduction for medical expenses.
He does go on and says that congress will likely fix this, however, no one knows exactly how. Either way, if this isn’t an issue for your 2008 taxes, it may be soon, as the goverments definition of “rich” shrinks.
I havn’t heard to much yet, but I would also keep an eye out for some new deductions or credits dealing with the nations mortgage crisis. Congress and the Fed appear fairly concerned about this and I wouldn’t put it past them to use their very own invisible hand to slap the market.
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Tags: Taxes
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September 26th, 2007 at 3:32 pm
$25 extra bucks… I will factor that into my budget. The ATM is bad news. Will the mortgage tax changes/credits really effect most renting young professionals?