What's New this Year?

 

Alternative Minimum Tax
Another AMT temporary fix. Congress increased the exemption allowances that were due to expire by $3700 MFJ and $1850 for individual filers. The allowances for the 2007 tax year are $66,250 MFJ, $33,125 MFS, and $44,350 S, HH.

This late change will create a delay in some refunds because the IRS will need to reprogram their computers.


Mortgage Insurance Premiums
These are now deductible through 2010, on newly acquired property used as your primary residence.

Mortgage Forgiveness Debt Relief
Homeowners who are forgiven their mortgage debt on their primary residence are excluded on paying tax on the cancellation of debt up to the amount of the outstanding acquisition loan (but not on an equity loan). This law will be in effect through 2010 has been extended through 2012

Clarification on claiming a qualifying child
First, a qualifying child is a child under 19, a student under 24, or someone disabled who lives with the taxpayer over 6 months, and is related as a brother/sister/child/niece/nephew/descendent, etc. But it is possible for a taxpayer to claim someone as dependent if they met certain requirements, even if they didn't meet the qualifying child requirements.
Previously, if Taxpayer(1) was able to claim someone as a dependent who was not his/her qualifying child, he/she could not if the dependent was Taxpayer(2)'s qualifying child. Now, if Taxpayer(2) is not required to file a return, or does so just to get EIC or get back taxes withheld, and does not claim the child, Taxpayer(1) can claim the child as a dependent. Of course, assuming all the requirements are met, particularly living in the household the entire year.


Standard Deductions/Personal Exemption Other Tax Adjustments


Ongoing Tax Laws