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CORDASCO FINANCIAL GROUP, INC. |
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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<S a mile. Rate for charitable driving remains at 14<t a mile.
- ESTATE TAX top rate remains at 4 5%, 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.
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