This page updated 1-2008

• The Child Credit for 2008 thru 2010 will remain at $1,000..
• Tax rates for capital gains and certain dividends are 15% (5% for some taxpayers). No change in that law is planned for 2008.
• The 2003 law increased the standard deduction for MFJ couples (re: the Marriage Penalty) to twice the standard deduction for single persons. This law continues for 2008. The 15% bracket also expanded for MFJ filers. The MFJ Standard deduction will be $10,900 for 2008, with personal exemptions of $3,500.
• The Estate Tax exemption remains at $2.0 million for 2008. The annual gift tax exclusion remains at $12,000 for 2008. The lifetime gift tax exemption will remain at $1 million.
• Maximum IRA contributions increases to $5,000 for 2008 for those under age 50. Taxpayers over age 50 can contribute $6,000 for 2008.
• 401(k) contributuions are to $15,500 for 2008 + $5000 catch-up for those age 50 & more.
• Simple plan contributuions will rise to $10,500, + $2,500 catch up for those over age 50.
• SEP plan contributions can be 25% of compensation/net earnings up to a max of $45,000.
• The Saver's Tax Credit continues for 2008, phase out for MFJ @ $52,000.
• The Adoption Credit increases to $11,650 for 2008. The phase-out will be AGI $174,730.
• Allowances for Educational IRA's remain the same , but they are still not deductible. You should condsider the Colorado "Scholar's Choice" 529 plan which as many advantages, including deductibility of your contribution on your Colorado return.
• Business auto mileage deduction for 2008 is 50.5 cents/mile. Medical & moving miles has been reduced to 19 cents/mile and charitable mileage remains at 14 cents/mile.
• The Self employed health insurance deduction continues at 100% and applies to >2% s-corp shareholders for plans established as a "company plan".
• The Section 179 depreciation write-off is $128,000 for 2008. The 50% bonus depreciation for capital assets expired 12-31-04. Allowance for SUV's cut back to $25,000 max.
• The Social Security wage base for 2008 will increase to $102,000.
• The "manufacturer's" deduction will increase to 6% for 2008.
• The 2006 law established new, taxpayer favorable rules for non-spousal IRA/Company retirement plan beneficiary rollovers.
• Congress passed the "AMT patch" which increased the MFJ exemption to $66,250.
• Beware of the new, far more restrictive charitable donation rules. Call us to find out more.

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