Tax Tips

2008 Tax Tips

Energy Credit
The Residential Energy has been extended for the 2007 tax year. The total credit allowed per taxpayer is $500.00 for both years. Therefore, if you claimed the credit for 2006 you may not be able to claim an additional credit.
Types of improvements that qualify are:
Heat Pumps
Exterior Windows
Exterior Doors
Energy Efficient Water Heaters

Mileage Allowance:
For 2007 you can deduct $0.485 for each mile driven for business. This does not include commuting miles to and from work. This allowance are for taxpayers who use their vehicle for business and are not reimbursed from their employer. This deduction is used instead of using actual expenses. You cannot use mileage and actual expenses. Self employed taxpayers and farmers can deduct this as a regular expense. Other taxpayers have to use it as an itemized deduction on Sch. A

You can also deduct $0.14 per mile for medical purposes and $0.20 per mile for charity miles driven. Charity miles would include trips such as volunteering for a Non-profit group.

Kiddie Tax:
For 2007 if a child under 18 years of age has unearned income of more than $1700.00, it will be taxed at the parents’ highest rate. Unearned income is interest, dividends, capital gain, etc

Capital Gain Tip:

For 2008-2010 some taxpayers may be able to have capital gain income without any tax. Depending on your taxable income your capital gain rate may be 0% or 15%.

For 2007, the capital gain rate is 5% or 15% depending on your taxable income.

Also for 2008-2010 the tax rate on qualified dividends are 0% or 15% depending on your taxable income.