2008 Tax Law Changes

SECTION 179 maximum deduction increases to $250,000. Phase-out threshold increases to $800,000.
STANDARD MILEAGE RATE for business driving increases to 58½ ¢ a mile. Rate for medical and moving mileage increases to 27¢ a mile. Rate for charitable driving remains at 14¢ a mile.
ESTATE TAX top rate remains at 45%, and the exemption amount remains at $2 million. The ANNUAL GIFT TAX EXCLUSION remains at $12,000.

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2008 Tax Law Changes

SECTION 179 maximum deduction increases to $250,000. Phase-out threshold increases to $800,000.
STANDARD MILEAGE RATE for business driving increases to 58½ ¢ a mile. Rate for medical and moving mileage increases to 27¢ a mile. Rate for charitable driving remains at 14¢ a mile.
ESTATE TAX top rate remains at 45%, and the exemption amount remains at $2 million. The ANNUAL GIFT TAX EXCLUSION remains at $12,000.
401(k) maximum salary deferral remains at $15,500 ($20,500 for 50 and older).
SIMPLE maximum salary deferral remains at $10,500 ($13,000 for 50 and older).
IRA contribution limit increases to $5,000 ($6,000 for 50 and older).
DEFINED CONTRIBUTION PLAN annual additions limit increases to $46,000 per year for contributions and forfeitures added to a retirement plan.
DEFINED BENEFIT PENSION PLAN annual maximum benefit per year increases to $185,000.
COMPENSATION maximum increases to $230,000 for the amount of wages that can be considered in a retirement plan.
HIGHLY COMPENSATED EMPLOYEE definition now considers employees earning over $105,000.
KIDDIE TAX threshold increases to $1,800 and now applies up to age 19 (up to age 24 for full-time students).
NANNY TAX threshold increases to $1,600.
TRANSPORTATION FRINGE BENEFIT limit increases to $115 for vehicle/transit passes and to $220 for qualified parking.
SOCIAL SECURITY taxable wage limit increases to $102,000. Retirees under age 65 can earn up to $13,560 without losing benefits.
HOPE CREDIT maximum increases to $1,800.
HSA CONTRIBUTION limit increases to $2,900 for individuals and to $5,800 for families. An additional $900 may be contributed by those 55 or older.
AMT exemption amounts for 2007 are $66,250 for joint filers, $33,125 for couples filing separately, and $44,350 for single taxpayers and heads of household.