Tax Topics For 2008
Personal Exemption: The deduction for each personal exemption for 2008 is $3,500. This deduction is phased out as the taxpayer’s adjusted gross income exceeds the following threshold amounts:
The personal exemption amount is reduced by 2 percent for each $2,500 (or fraction thereof) by which the taxpayer’s adjusted gross income exceeds the applicable amount.
Filing Status Amount
Single $159,950
Head of Household $199,950
Joint Return $239,950
Married, filing separately $119,975
Standard Deduction for 2008:
Filing Status Amount
Single $ 5,450
Head of Household $ 8,000
Joint Return $10,900
Married, filing separately $ 5,450
Additional Standard Deductions: (age 65 or older or blind)
Single $1,350
Married/widow(er) $1,050
Standard Deduction for Dependents:
The greater of $900 or $300 plus the amount of earned income, not to exceed $5,450.
Filing Requirements for Individuals for 2008:
Note: Self-employed persons with net earnings of $400 or more are required to file a return
regardless of the amount of the gross income.
Filing and Marital Status, Age Amount
Single, under 65 $ 8,950
Single, 65 or older $10,300
Head of Household, under 65 $11,500
Head of Household, 65 or older $12,850
Married, joint return $17,900
Married, joint return, one 65 or older $18,950
Married, joint return, both over 65 $20,000
Married, filing separately $ 3,500
Qualifying widow(er), under 65 $14,400
Qualifying widow(er), 65 or older $15,450
Social Security Wage Base for 2008: $102,000 base at 6.2% for employees & employers
Taxation of Social Security Benefits:
For single taxpayers with provisional income between $25,000 and $34,000,
50 percent of the benefits are taxable. (Provisional income is modified AGI
plus half the taxpayer’s social security.) For married persons filing jointly,
the range is $32,000 to $44,000.
For single taxpayers with provisional income above $34,000 and married
taxpayers filing jointly with provisional income above $44,000, up to 85%
of social security benefits may be taxable.
Self-Employment Tax Rate: remains unchanged at 15.3%
Earned Income Credit:
For 2008, the earned income credit (EIC) is available to workers with qualifying
children and for childless workers. Beginning in 2002 taxpayers will use AGI
to qualify, not Modified Adjusted Gross Income. Furthermore, taxpayers have
two schedules for the credit, one for filing Married Filing a Joint Return and
a second for filing Not Married.
è Claiming the EIC as Married Filing a Joint Return, a taxpayer must:
a. Have earned income, such as wages and self-employment income, of under
$36,995 if the taxpayers have one qualifying child or under $41,646 if they
have two or more qualifying children.
b. Have a qualifying child who lived in his/her main home in the United States
for more than six months of the year.
c. May file without a qualifying child if earned income is under $15,880.
è Claiming the EIC Not as Married Filing a Joint Return, a taxpayer must:
a. Have earned income, such as wages and self-employment income, of under
$33,995 if the taxpayers have one qualifying child or under $38,646 if they
have two or more qualifying children.
b. Have his/her main home in the United States for more than six months of the year.
c. May file without a qualifying child if earned income is under $12,880.
d. NOT be a qualifying child of another taxpayer and NOT be a dependent of another taxpayer.
e. Be at least 25 but under 65 years old. If filing jointly, one spouse must satisfy the age test.
Standard Mileage Rate(s):
Business:
The standard mileage rate from January 1st – June 30th is 50.5 cents per mile and from
July 1st – December 31st 2008 is 58.5 cents per mile.
Medical:
The standard rate for medical mileage is .19 cents per mile from January 1st – June 30th
and .27 cents per mile from July 1st – December 31st 2008.
Charity:
The standard rate for charitable mileage is .14 cents per mile for 2007 and 2008.