Tax Changes for 2008

• The social security taxable wage base increases from $97,500 to $102,000.
• The limit for contributions to a traditional or Roth IRA increases from $4,000 to $5,000.
• The contribution limit for 401(k) plans remains $15,500, with an additional $5,000 per year which can be contributed by employees who are age 50 and older during 2008.  (If you turn 50 in 2008 you qualify!)
• The business mileage deduction increases from 48.5 cents per mile to 50.5 cents per mile.  (imagine that!)
• The threshold for the phase-out of itemized deductions increases from $156,400 to $159,950 for all filers except married, filing separately ($79,975 each).
• The personal exemption amount increases from $3,400 to $3,500.
• Unearned income of a child that is not subject to tax (the so-called "kiddie" tax) increases from $1,700 to $1,800.

           - Kevin Palmer