Good Morning Gentle Readers,
Not a whole lot of any significance changed during 2008. Some tax breaks got better, some limits and thresholds were increased or decreased. There were minor tweaks and a couple of upticks.
IT IS OF SOME SIGNIFICANCE that CONgress also fiddled with Alternative Minimum Tax (AMT) so as to not stick it to some taxpayers as hard they originally intended. Didn't occur to them to abolish it or at least index it to compensate for the last forty years of inflation.
Mind you, AMT was instituted way back in the bad old days because there were twenty millionaires who didn't pay any income tax in 1967. By 2010 AMT will ding more than 30 million taxpayers. If you want to point fingers, especially if it's your middle finger, point it at LBJ and Tricky Dick. Yet another bipartisan effort seen to fruition. [turns and spits]
IT IS IMPORTANT TO NOTE that John Q Taxpayer will likely pay a bit less in federal income tax for 2008 than he did for 2007 (all else being equal--meaning same income, same deducts).
ONE MAJOR CHANGE is that first-time home buyers get a tax credit that caps at $7,500.00. You had to buy after April 8, 2008. It isn't really a true credit, however, because you have to give a piece of it back every year for fifteen years. If you sell, the balance is all due and payable then and there. [insert some snarky remark about the mortgage industry bail out here].
2008 Tax Organizers will be available soon.