Tax Saving Options in 2008 rules: Part II
Mortgage Insurance Deductions
Congress previously approved a one-year deduction for mortgage insurance premiums in 2007. A full deducation was available for taxpayers with and AGI of $100,000 or less. Once income exceeded $100,000, the deducation was phased out.
The new mortgage relief law extends this tax break for three years through 2010. Therefore, you may qualify for a 2008 deducation for amounts paid or accrued this yeat.
The Kiddie Tax
Under the kiddie tax, a childs investment income above a threshold ($1,800 for 2008) is taxed at the top tax rate of his or her parents. Prior to this year, the kiddie tax applied to children under age 18.
But now the rules have changed.
Beginning in 2008, the kiddie tax generally applies to your children who are under the age 19 or full-time students under age 24 if they can be claimed as your dependents.
To minimize the tax damage, try to keep investment income of children below or near the $1,800 threshold. For example, you might have a child switch funds into a tax-deferred or tax-free investment vehicles.
Filed under: Taxes
I’m not too sure, but aren’t these laws different in different states? I mean, the change in rules aren’t nation wide.. or are they??
Peace.
These are changes to the federal tax laws and impact federal level taxes. As you point out the impact will vary at the state level of taxation.