Tax Changes for Individuals | |
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2007 Form 1099-DIV New regulations have been issued for regulated investment companies (RICs) reporting foreign taxes. Alternative Minimum Tax (AMT) There are several changes to the alternative minimum tax. Capital Asset Treatment for Self-Created Musical Works Certain musical compositions and copyrights in musical works may be treated as capital assets. Charitable Contributions There are new recordkeeping requirements for cash contributions, there are new limitations on contributions to donor-advised funds, and there is a new filing fee for easements on buildings in historic district. Child-Related Tax Changes Information on adoption benefits, child and dependent care credit, child's investment income, and additional child tax credit. Conflict-of-Interest Sales If you are a judicial officer and you sell property at a gain after December 20, 2006, according to a certificate of divestiture issued by the Judicial Conference of the United States (or its designee) and purchase replacement property (permitted property) within 60 days after the sale, you may elect to defer part or all of the realized gain. Credit for Prior Year Minimum Tax New rules apply for calculating the prior year minimum tax credit. Credit for Employer Social Security and Medicare Taxes Paid on Certain Employee Tips When figuring the credit, the amount of tips received during the month should be reduced by wages payable. Earned Income Credit The earned income credit amounts have increased for 2007 and 2008. Economic Stimulus Payment You may be eligible to receive a payment as part of the Economic Stimulus Act of 2008. Education-Related Tax Changes Information on education savings bond exclusion, hope and lifetime learning credits, tuition and fees deduction, and student loan interest deduction. Exclusion of Income for Volunteer Firefighters and Emergency Medical Responders For tax years beginning after 2007 and before 2011, gross income ... Expired Tax Benefits The tax benefits that have expired and will not apply for 2008. Federal Telephone Excise Tax Credit This credit was available only on your 2006 return. If you filed but did not request it on your 2006 return, file Form 1040X . Foreign Earned Income Tax Worksheet Revised Use the revised foreign earned income tax worksheet when filing Forms 2555 and 2555-EZ for 2007. Form 1040 and Form 1040NR Instructional Changes The Tax Technical Corrections Act of 2007 changed the filing instructions for Form 1040 and Form 1040NR. Health/Medical-Related Tax Changes Information on Archer Medical Savings Accounts (MSAs), Health Savings Accounts(HSAs), and long-term care premiums. Home/Residence-Related Tax Changes Information on mortgage insurance premiums, residential energy credits, and sale of main home by employees of intelligence communities. Increase in Limit on Long-Term Care and Accelerated Death Benefits Exclusion New limits on exclusion payments made under a long-term care insurance contract. Itemized Deductions The itemized deduction phaseout income limits have increased for 2007 and 2008. Maximum Tax Rate on Qualified Dividends and Net Capital Gain Reduced There are changes to the maximum tax rate on qualified dividends and net capital gain. New Form 8919 If you were an employee treated as an independent contractor, use new Form 8919 to figure and report uncollected social security and Medicare taxes. Penalty for Erroneous Claim for Refund or Credit There is a new penalty if you file a claim for refund or credit of income tax in an excessive amount, and you did not have a reasonable basis for making the claim. Penalty for Failure to File Income Tax Return Increased The failure to file penalty has increased. Penalty for Frivolous Tax Submissions Increased The penalty for frivolous filings has increased. Personal Exemptions The deduction amount and phaseout income levels have increased for 2007. Also, the definition of qualifying relative is clarified. Recovery Rebate Credit See if you are eligible for the recovery rebate credit. Social Security and Medicare Taxes The maximum amount of wages subject to the social security tax and Medicare tax has increased for 2007 and 2008. Special Rules for Owners of Cooperative Apartments You may qualify to deduct your share of the corporation's deductible real estate taxes. Standard Deduction Amount Increases The standard deduction for people who do not itemize deductions on Schedule A (Form 1040) is, in most cases, higher for 2007 and 2008. Standard Mileage Rate The standard mileage rate for business use of your vehicle, medical and move- related use and charitable use has increased for 2007 and 2008. Vacant Land Used as Part of Main Home Destroyed by a Hurricane You may qualify to exclude from income gain from the sale of vacant land you owned and used as part of your main home that was destroyed by Hurricanes Katrina, Rita, or Wilma. Wage Threshold for Household Employees The social security and Medicare wage threshold for household employees is... Whistleblower Fees You may be eligible to deduct attorney fees and court costs in relation to an award from the IRS. |
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