The IRS has announced the annual inflation-adjusted amounts for personal exemptions, the standard deduction, maximum pension plan contributions, and other tax items for 2008.
The deduction for each Personal Exemption for 2008 is $3,500.
The deduction for each Personal Exemption for 2008 is $3,500.
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The Standard Deduction amounts for 2008 are:
The Standard Deduction amounts for 2008 are:
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· $ 5,450 for Single
· $10,900 for Married Filing Joint and Qualifying Widow(er)
· $ 8,000 for Head of Household
· $ 5,450 for Married Filing Separate
· $ 5,450 for Single
· $10,900 for Married Filing Joint and Qualifying Widow(er)
· $ 8,000 for Head of Household
· $ 5,450 for Married Filing Separate
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The additional Standard Deduction amounts for age 65 or older and/or blind for 2008 are:
The additional Standard Deduction amounts for age 65 or older and/or blind for 2008 are:
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· $1,350 for Single and Head of Household – up from $1,300 for 2007
· $1,050 for Married (Joint and Separate) and Qualifying Widow(er) – same as 2007
· $1,350 for Single and Head of Household – up from $1,300 for 2007
· $1,050 for Married (Joint and Separate) and Qualifying Widow(er) – same as 2007
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The 2008 Standard Deduction for a dependent is the greater of $900 or the sum of $300 and the dependent's earned income, not to exceed $5,450 (plus $1,350 if age 65 or blind) – up from $850 for 2007.
The 2008 Standard Deduction for a dependent is the greater of $900 or the sum of $300 and the dependent's earned income, not to exceed $5,450 (plus $1,350 if age 65 or blind) – up from $850 for 2007.
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The 2008 annual contribution limits for retirement plans are:
The 2008 annual contribution limits for retirement plans are:
· $15,500 (plus an additional $5,000 if age 50 or older at the end of 2008) for 401(k) and 403(b) plans – same as 2007
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· $15,500 (plus an additional $5,000 if age 50 or older at the end of 2008) for 457 Plans (Deferred Compensation for state and local government employees) – same as 2007
· $15,500 (plus an additional $5,000 if age 50 or older at the end of 2008) for 457 Plans (Deferred Compensation for state and local government employees) – same as 2007
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· $10,500 (plus an additional $2,500 if age 50 or older at the end of 2008) for SIMPLE plans – same as 2007
· $10,500 (plus an additional $2,500 if age 50 or older at the end of 2008) for SIMPLE plans – same as 2007
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· $46,000 for Defined Contribution KEOGH plans – up from $45,000 for 2007
· $46,000 for Defined Contribution KEOGH plans – up from $45,000 for 2007
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· $46,000 for Self-Employed SEP plans (allowable contribution equal to 25% of net earnings of up to $230,000, which translates to 20% multiplied by the total of "net earnings from self-employment" from Schedule C, Schedule C-EZ or Form K-1 less the deduction for 50% of self-employment tax) – up from $45,000 for 2007
· $46,000 for Self-Employed SEP plans (allowable contribution equal to 25% of net earnings of up to $230,000, which translates to 20% multiplied by the total of "net earnings from self-employment" from Schedule C, Schedule C-EZ or Form K-1 less the deduction for 50% of self-employment tax) – up from $45,000 for 2007
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· $5,000 (plus an additional $1,000 if age 50 or older at the end of 2008) for traditional and ROTH Individual Retirement Accounts (IRA) – up from $4,000 for 2007
· $5,000 (plus an additional $1,000 if age 50 or older at the end of 2008) for traditional and ROTH Individual Retirement Accounts (IRA) – up from $4,000 for 2007
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The compensation limit for participation in a SEP is $500.00 – same as 2007.
The compensation limit for participation in a SEP is $500.00 – same as 2007.
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The maximum Hope credit, available for the first two years of post-secondary education, is $1,800, up from $1,650 in 2007.
The maximum Hope credit, available for the first two years of post-secondary education, is $1,800, up from $1,650 in 2007.
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I will be adding a WHAT’S NEW FOR 2008 Page to my website with the above information, the 2008 tax rate schedules and additional 2008 changes by the end of October.
I will be adding a WHAT’S NEW FOR 2008 Page to my website with the above information, the 2008 tax rate schedules and additional 2008 changes by the end of October.
2 comments:
Do you have a source or link to reference?
Single Ma-
There is IRS Information Release IR-2007-172 at www.irs.gov/newsroom/article/0,,id=174876,00.html and Revenue Proclamation 2007-66 at www.irs.gov/pub/irs-drop/rp-07-66.pdf.
TWTP
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