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Beginning Jan. 1, 2007, the standard mileage rates for the use of a car (including vans, pickups or panel trucks) will be:
44.5 cents per mile for business miles driven;
18 cents per mile driven for medical or moving purposes; and
14 cents per mile driven in service of charitable organizations, other than activities related to Hurricane Katrina relief.
Katrina-related charitable rates will be 32 cents per mile for deduction purposes and 44.5 cents per mile for reimbursement purposes
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For 2007, the maximum amount of elective deferrals under a salary reduction agreement that can be contributed to a qualified plan increases to $15,000 ($20,000 if you are age 50 or older). However, for SIMPLE plans, the amount is $10,000 ($12,500 if you are age 50 or older). |
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The maximum compensation used for figuring contributions and benefits for a retirement plan will increase from $210,000 to $220,000 for 2007. |
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You may be able to take a credit based on the face amount of any clean renewable energy bond you hold during 2007. The amount of any credit before tax liability limits must be included as interest income. |
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The AMT exemption amount will decrease to $33,750 ($45,000 if married filing jointly or a qualifying widow(er); $22,500 if married filing separately). |
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The deduction from AGI for educator expenses will expire. To deduct educator expenses, you must itemize your deductions. |
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You cannot take a deduction for qualified tuition and fees paid in 2007. But you still may be able to take a credit for these expenses |
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The AMT exemption amount is increased to $42,500 ($62,550 if married filing jointly or a quali-fying widow(er); $31,275 if married filing separately). |
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You may be able to take the EIC if:
A child lived with you and you earned less than $36,348 ($38,348 if married filing jointly), or
A child did not live with you and you earned less than $12,120 ($14,120 if mar-ried filing jointly).
The maximum AGI you can have and still get the credit also has increased. You may be able to take the credit if your AGI is less than the amount in the above list that applies to you.
The maximum investment income you can have and still get the credit has increased to $2,800. |
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Form 8615 must be used to figure the tax of children under age 18 with investment income of more than $1,700. |
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The standard deduction for taxpayers who do not itemize deductions on Schedule A of Form 1040 is, in most cases, higher for 2007 than it was for 2005. The amount depends on your filing status, whether you are 65 or older or blind, and whether an exemption can be claimed for you by another taxpayer.
The basic standard deduction amounts for 2007 are:
• Head of household — $7,550
• Married taxpayers filing jointly and qualifying widow(er)s — $10,300
• Married taxpayers filing separately — $5,150
• Single — $5,150
The standard deduction amount for an individual who may be claimed as a dependent by another taxpayer may not exceed the greater of $850 or the sum of $300 and the individual's earned income. |
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The amount you can deduct for each exemption has increased from $3,200 in 2005 to $3,300 in 2007.
You lose all or part of the benefit of your exemptions if your adjusted gross income is above a certain amount. The amount at which the phase-out begins depends on your filing status. For 2007, the phase-out begins at:
• $112,875 for married persons filing separately,
• $150,500 for single individuals,
• $188,150 for heads of household, and
• $225,750 for married persons filing jointly or qualifying widow(er) s |
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If you paid the federal excise tax on your long distance or bundled telephone service, you may be able to request a credit. |
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