Important Tax Changes for 2008
The following table provides some important tax information for 2008, compared with 2007. Save it as a handy planning reference.
| Social Security / Medicare |
2008 |
2007 |
| Social Security Taxable Wage Base |
$102,000 |
$97,500 |
| Medicare Taxable Wage Base |
No limit |
No limit |
| Individual Retirement Accounts |
2008 |
2007 |
| Roth IRA Individual, up to 100% of earned income |
$5,000 |
$4,000 |
Traditional IRA Individual,
up to 100% of earned Income |
$5,000 |
$4,000 |
|
Roth and traditional IRA additional annual “catch-up” contributions for account owners age 50 and older
|
$1,000 |
$1,000 |
| Annual Qualified Plan Limits |
2008 |
2007 |
|
Defined Contribution Plan Dollar limit on additions on Sections 415(c)(1)(A)
|
$46,000 |
$45,000 |
|
Defined Benefit Plan limit on benefits (Section 415(b)(1)(A))
|
$185,000 |
$180,000 |
|
Maximum compensation used to determine contributions
|
$230,000 |
$225,000 |
|
401(k), SARSEP, 403(b) Plan Deferrals (Section 402(g)), & 457 Plan deferrals (Section 457(b)(2))
|
$15,500 |
$15,500 |
|
401(k), 403(b), 457 & SARSEP additional “catch-up” contributions for employees age 50 and older
|
$5,000 |
$5,000 |
|
SIMPLE deferrals (Section 408(p)(2)(A))
|
$10,500 |
$10,500 |
SIMPLE additional “catch-up” contributions
for employees age 50 and older |
$2,500 |
$2,500 |
|
Compensation defining highly compensated employee (Section 414(q)(1)(B))
|
$105,000 |
$100,000 |
| Compensation defining key employee (officer) |
$150,000 |
$145,000 |
|
Compensation triggering Simplified Employee Pension (SEP) contribution requirement (Section 408(k)(2)(c))
|
$500 |
$500 |
| Driving Deductions |
2008 |
2007 |
| Business mileage, cents per mile |
50.5 |
48.5 |
| Charitable mileage, cents per mile |
14 |
14 |
| Medical and moving mileage, cents per mile |
19 |
20 |
| Business Equipment |
2008 |
2007 |
| Maximum Section 179 expense deduction |
$128,000 |
$125,000 |
| Phaseout for Section 179 |
$510,000 |
$500,000 |
Qualified Transportation
Fringe Benefit Exclusion |
2008
|
2007 |
Commuter highway vehicle and transit pass,
per month |
$115 |
$110 |
| Qualified parking, per month |
$220 |
$215 |
| Domestic Employees |
2008 |
2007 |
| Annual threshold when a domestic employer is liable to withhold and pay FICA for babysitters, housekeepers, etc. |
$1,600 |
$1,500 |
| Standard Deduction |
2008
|
2007 |
|
Married filing jointly
|
$10,900 |
$10,700 |
|
Single (and married filing separately)
|
$ 5,450 |
$ 5,350 |
|
Heads of Household
|
$ 8,000 |
$ 7,850 |
| Itemized Deduction Phase-Out |
2008 |
2007 |
Amount for all filing status categories
except married filing separately |
$159,950 |
$156,400 |
| Married filing separately |
$ 79,975 |
$ 78,200 |
|
Personal Exemption
|
2008 |
2007 |
|
Amount
|
$3,500 |
$3,400 |
|
Kiddie Tax
|
2008 |
2007 |
|
Net unearned income for an child that is not subject to the “kiddie tax”
|
$1,800 |
$1,700 |
| Annual Exclusion for Gifts |
2008 |
2007 |
| Amount you can give to each recipient |
$12,000 |
$12,000 |
| IRS Interest Rates |
2008
(1st quarter) |
2007
(4th quarter) |
| Tax overpayments |
7 percent
(6 percent for corporations;
4.5 percent for the
portion of corporate
overpayments
exdeeding $10,000) |
8 percent
(7 percent for corporations;
5.5 percent for the portion of corporate
overpayents
exceeding $10,000) |
| Tax underpayments |
7 percent
(10 percent for
large corporate
underpayments) |
8 percent
(10 percent for
large corporate
underpayments |
This entry was posted on 9. January 2008 at 15:42 and is filed under taxes. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response or trackback from your own site.