As we’re all in a rush to prepare last year’s tax return, it’s worth going over the changes that occurred to the tax laws that are applicable for your 2008 returns quickly.
- Stimulus Payments Are Tax-Free
You need to report your stimulus payments as the recovery rebate credit on your federal income tax return, but you don’t owe any taxes on it. It is important to remember to record it: if you’re eligible for a further recovery rebate credit because you had a child in 2008 or did not receive a stimulus check, your income tax return will affect whether you can claim it.
- AMT Exemption Increased
The Alternative Minimum Tax levels increased slightly in 2008. For married couples, it’s $69,950 — or $34,975 if you file separately. If you are single or a head of household, it’s $46,200.
- Get Green Tax Breaks
There are several tax breaks if you’ve gone green over the last year, including the residential energy-efficient property credit and the alternative motor vehicle credit.
- Standard Deduction Increased
The basic standard deduction went up in 2008. It’s now $10,900 for married couples — or $5,450 if you’re filing separately. It’s also $5,450 if you’re single. It’s $8,000 for heads of household.
- Tax Relief for Disaster Areas
If you lived in the Midwest and were affected by the major storms, tornadoes and floods that hit Arkansas, Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri, Nebraska and Wisconsin, you may be eligible for some tax relief.
- Standard Mileage Rates Increased
For business mileage, the rates are 50.5 cents per mile driven from Jan. 1, 2008, to June 30, 2008 and 58.5 cents per mile driven from July 1, 2008 to Dec. 31, 2008. For medical or moving mileage expenses, the rates are 19 cents per mile driven from Jan. 1, 2008, to June 30, 2008 and 27 cents per mile driven from July 1, 2008 to Dec. 31, 2008. For charitable mileage deducations, the rate is 14 cents per mile for the entirety of 2008.