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Carver Communications - Index

Carver Communications - 2.1.09 - Index

Vol.XXVII, No.3 © Carver Communications, Inc. February 1, 2009
Changes For 2008 Taxes That Can Affect You!
By Michele Rowe
The 2008 Tax Year is loaded with
changes that could affect your bottom line.
Due to the annual adjustments in the tax
code, most taxpayers will enjoy a higher
standard deduction, a higher personal
exemption amount, and wider tax brackets.
This means that most taxpayer's income
will be taxed at a lower rate. Please carefully
review your income tax return to
make sure you are taking every advantage
due you.
Some key tax provisions are as follows:
Standard Deduction: The new
standard deduction is $5,450 for singles
and married individuals filing separately,
$10,900 for married couples filing a joint
return, and $8,000 for head of household.
Personal Exemptions: The value
of each personal and dependency exemption,
available to most taxpayers, increases
$100 from 2007 to $3,500 in 2008.
Tax Brackets: For 2008, tax-bracket
thresholds increased approximately 2%
for each filing status. Expanding the
brackets means a little more of your
P.O. Box 33862
San Antonio, Texas 78265
income will be taxed at lower rates than
might have been the case last year. That
will mean savings for you.
Self-Employment Tax Changes:
The maximum amount of self-employment
income subject to Social Security
taxes increases to $102,000 in 2008, up
from $97,500 in
2007. The selfemployment
tax
rate remains 15.3%.
However, for those
who receive Social
S e c u r i t y
Retirement, disability
benefits, or
Conservation Reserve Program (CRP)
payments they are now exempt from the
15.3% social security self-employment
tax. In addition, if you are self-employed,
you may qualify for a tax deduction for
contributions you made to a qualified
retirement plan. You must have selfemployment
income to qualify and there
are limits to the amount that can be deducted.
Recovery Rebate Credit: This is a
PRSRT STD
U.S. Postage
PAID
San Antonio, Texas
Paid Permit #1957
one-time benefit for those taxpayers who
did not receive the full economic stimulus
payment last year and whose circumstances
may have changed, making them
eligible now for some or the entire unpaid
portion (other eligibility requirements may
apply). Generally, the credit is added to
the amount of your tax refund
or lowers the amount of taxes
you owe.
With the problems in the
housing market, it is now obvious
that homeowners and
potential homeowners are
under tremendous financial
pressure. To help ease this
pressure the following new tax laws have
been passed:
Property Tax Deductions for Nonitemizers:
Non-itemizers can increase
their standard deduction by the lesser of
their property tax, or $1,000 if filing jointly,
or $500 for other filers. This will benefit
those whose deductions do not exceed
the standard deductions.
Mortgage Insurance Premiums:
The tax code allows taxpayers with adjusted
gross incomes of less than $100,000 to
deduct the cost of mortgage insurance premiums
on mortgages originating between
2007 and 2010. For those who earn
between $100,000 and $109,000 you can
only write-off part of the premiums paid
and taxpayers over the $109,000 are not
able to take this deduction.
First-Time Home Buyer Credit:
This tax credit is for first-time homebuyers
who purchase a home after April 8, 2008
and before July 1, 2009. The credit equals
10% of the home’s purchase price up to a
maximum amount of $7,500. This amount
is $3,750 if married filing separately.
There are income limits to qualify and you
must pay the credit back to the government
over the next 15 years.
Foreclosure Debt Forgiveness:
Normally debt forgiveness is considered
income by the IRS. A new law allows certain
debt forgiveness to be tax-free on your
principal residence. From 2007 to 2009
you may be able to exclude up to $2 million
($1 million if married filing separate)
of debt forgiveness if the principal amount
you owe on your mortgage was reduced
through mortgage restructuring or if your
mortgage debt was forgiven in connection
with a foreclosure.
Looking to the future - What can
you expect for 2009:
Decrease in the Standard Mileage
Rate: The new rates are slightly lower
than rates for the second half of 2008,
decreasing from 58.5 cents to 50.5 cents
per mile.
Energy-saving Improvements to
Commercial Real Estate: The special
expensing allowed for the cost of energysaving
improvements to commercial buildings
is not available after 2008.
Tax Credit for Energy-efficient
Homes: The special credit for builders
selling energy-efficient homes expired in
2008.
Solar Heating Credit: The 30%
tax credit for businesses buying solar heating
units and fuel cells falls to 10% for
those that are placed in service after 2008.
It is still up in the air as to what will
actually become law in 2009. Keep
informed! If you have any questions,
please do not hesitate to give us a call at
210-340-8855, email us at
FredFlores@FredFloresandco.com or visit
our website at www.fredflorescpa.com.