Obviously the main tax thing on all our minds until
But as tax geeks and faithful readers of the ol’ blog (is that redundant?) know, we also need to think at least a bit about 2008 taxes early in the year, too. The best way to cut or at least keep your tax bill under control is through year-round planning.
So to help out on 2008 taxes, here are some figures to keep in mind.
First and foremost are the tax brackets. Because of inflation, the thresholds increase each year for each filing status. This year they are:
Then there’s the always critical deduction issue. On 2008 returns, the standard deduction will be $10,900 for married couples filing a joint return (a $200 increase over 2007); $5,450 for singles and married individuals filing separately (up $100); and $8,000 for heads of household (up $150).
Around two-thirds of us take the standard deduction, rather than itemize. The key is to use the one that will get you the bigger tax break. This story looks at some things to think about in making your deduction method decision.
If you find as 2008 goes on that the expenses you can itemize are getting close to the standard amount, consider bunching to get your itemized amounts over the threshold. This story has more on that technique.
Golden Years saving: It’s never too early to think about your retirement. In 2008 you generally can contribute up to $5,000 to a traditional or Roth IRA, $6,000 if you’re age 50 or older.
The contribution amount allowed this year for Roth IRAs begins to phase out for joint filers with incomes greater than $159,000 (up from $156,000) and $101,000 (up from $99,000) for singles and heads of household.
For contributions to a traditional IRA in 2008, the deduction phase-out range for an individual covered by a retirement plan at work begins at income of $85,000 for joint filers (up from $83,000) and $53,000 for a single person or head of household (up from $52,000).
And
