2008 IRS Tax Changes - 1040 and 1040NR

[Administrator]

IRS 2008 Tax Changes





Sources: CCH Calculations (9/26/07)
IRS Announcement (10/18/07)
IRS Revenue Procedure - 20 page pdf (10/18/07)


2008 Personal Exemptions

$3,500 per person and dependent
These are phased out for the evil rich, which for this issue is defined as adjusted gross income (AGI) of over:
$119,975 for Married Filing Separately
$159,950 for Single
$199,950 for Head of Household
$239,950 for Married Filing Jointly

2008 Standard Deductions
Single: $5,450 + $1,350 if over 64 and/or blind
Married Filing Jointly: $10,900 + $1,050 each if over 64 and/or blind
Married Filing Separately: $5,450 + $1,050 if over 64 and/or blind
Head of Household: $8,000 +$1,350 if over 64 and/or blind
Dependents: Higher of $900 or earned income plus $300

Itemized Deductions are phased out for the evil rich, which for this issue is defined as adjusted gross income (AGI) of over:
$ 79,975 for Married Filing Separately
$159,950 for Single
$159,950 for Head of Household
$159,950 for Married Filing Jointly


Ordinary Income Tax Rates
Married Filing Jointly
Single
Head of Household
Married Filing Separately

Married Filing Jointly
Taxable Income
Rate
$0 - $16,050
10.0%
$16,051 - $65,100
15.0%
$65,101 - $131,450
25.0%
$131,451 - $200,300
28.0%
$200,301 - $357,700
33.0%
$357,701 & Over
35.0%

Single
Taxable Income
Rate
$0 - $8,025
10.0%
$8,026 - $32,550
15.0%
$32,551 - $78,850
25.0%
$78,851 - $164,550
28.0%
$164,551 - $357,700
33.0%
$357,701 & Over
35.0%

Head of Household
Taxable Income
Rate
$0 - $11,450
10.0%
$11,451 - $43,650
15.0%
$43,651 - $112,650
25.0%
$112,651 - $182,400
28.0%
$182,401 - $357,700
33.0%
$357,701 & Over
35.0%

Married Filing Separately
Taxable Income
Rate
$0 - $8,025
10.0%
$8,026 - $32,550
15.0%
$32,551 - $65,725
25.0%
$65,726 - $100,150
28.0%
$100,151 - $178,850
33.0%
$178,851 & Over
35.0%

Capital Gains Tax Rates

Gains from sales of assets owned less than or equal to one year are taxed as ordinary income.

Depreciation recapture (Section 1250 gain) is subject to a Federal income tax of 25%.

Gains from sales of assets that have been owned for more than twelve months are taxed at special lower rates. They are based on the rates which would apply if they were ordinary income.

Income that would otherwise be in the 10% or 15% brackets: 0%

Income that would otherwise be in the 25% or higher brackets: 15%

Dividend Income

Income that would otherwise be in the 10% or 15% brackets: 0%

Income that would otherwise be in the 25% or higher brackets: 15%