Important Changes for the 2008 Tax Year

Before you go to see your tax preparer, check to see if you are eligible for any of the following items. If you are, make sure you take the proper documentation with you.

The deduction for state and local sales taxes on Form 1040 Schedule A, Line 5 was renewed for 2008. If you purchased any large tickets items (car, truck, boat, RV, etc.), find your receipts. These purchases may give you a larger deduction on Schedule A.

Are you a K-12 educator? If so, the $250 educator expense deduction on the 1040 was renewed. Gather your receipts for items you purchased for your classroom, but that the school did not reimburse you for.

Did you pay post-secondary tuition and fees? You may be able to take these expenses on Form 8917.

Did you pay state or local real estate taxes. If so, you may be able to deduct them. If you itemize deductions, you can claim these taxes on Schedule A. If you take the standard deduction, you can take a portion of these taxes directly off the 1040.

For 2008, more taxpayers can make tax-deductible contributions to a traditional IRA. The deduction is phased out for singles and heads of household who are covered by a workplace retirement plan and have modified adjusted gross incomes between $53,000 and $63,000. For married couples filing jointly, the income phase-out range is $85,000 to $105,000.

The standard mileage rates were raised twice during 2008.

                              Jan. 1 to June 30    July 1 to December 31
Business                50.5 cents               58.5 cents
Medical                  19 cents                  27 cents
Deductible Move   19 cents                  27 cents

The standard mileage rate for using a car to provide services to charitable organizations remained at 14 cents. Special rates apply to the Midwest disaster area.

The Kiddie Tax was revised. The tax on a child's investment income previously only applied to children younger than age 18. It now applies if the child has investment income greater than $1,800 and was:

• Younger than 18; or
• 18 years of age and had earned income that was equal to or less than half of his or her total support in 2008; or
• Older than 18 and younger than 24, a student and during 2008 had earned income that was equal to or less than half of his or her total support.

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