Charleston Real Estate Market

I’m no accountant but it’s nice to know ahead of time that some things will save you money and some things are going to cost you.

10 Tax Changes for the Next Tax Year –  2008 from Realtor magazine*

1. More Money For Gas.  Just in time as the prices at the pump rise, the standard business mileage rate increases to 50.5 cents
2. More Money For Retirement.  You will be able to contribute $5,000 to your IRA in 2008, $6,000 if you’re over 50.
3. No Breaks for Sales Tax.  The provision that allowed you to deduct state sales tax expired at the end of 2007.
4. More Tax Breaks for Retirement Savings. Married taxpayers with an annual income of up to $85,000 filing jointly will be able to deduct IRA contributions: individuals with an income of up to $53,000 can take the deduction.
5. Higher Standard Deduction.  If you’re one of the two thirds of taxpayers who don’t itemize, you’ll be able to deduct $10,900 as a married couple filing jointly in 2008. Singles can deduct $5,450.
6. No Tax on SOME Capital Gains.  Joint filers with a taxable income not exceeding $65,100 and single filers whose income does not exceed $32,550 don’t have to pay tax on any capital gains they realize in 2008; the rate for other taxpayers remains15%.
7. More Time to Sell a House When You Lose a Spouse.  Taxpayers who lose a spouse now have up to two years after that death to take the maximum exclusion of $500,000 in gain on the sale of the principal residence. The other requirements for the exclusion must have been met before the death.
8. Less Money Back for Some Hybrid Cars.  While it can still save you money, thetax credit has been phased out on many popular models. Check out the 2008 Model Year Hybrid List at http://www.irs.gov/ before you buy.
9. Tougher Taxes for Kids.  Children 18 and under or full time students up to 24 years old will pay taxes on their investment income over $17,000 at their parents’ tax rate. Note that this rate does not apply to wages a child earns.
10. Higher Cutoffs for Social Security.  The maximum amount of earningssubject to Social Security tax increases to $102,000 in 2008.

Filed under: Business News, Life Tips on April 2nd, 2008