Top 7 Tax Law Changes For 2007

By Mike Gifford

There is a new law for record keeping of charitable contributions. You must have a record of any cash contributions you made to a charity in 2007 in order to deduct the contribution. The record could be a canceled check or copy of a canceled check, a bank statement that shows the date, amount and name of the charity, or a letter from the charity showing the amount and date.

The earned income amount for the additional child tax credit has increased to $11,750. The earned income credit amount for one qualifying child has increased to $2,853. if you have more than one child the maximum earned income credit is $4,716 and $428 for no children. The maximum earned income amount has also increased to $39,783 if you are married and filing a joint tax return or $37,783 if you are single or filing separately with more than one child. If you have only one child, the maximum earned income amount is $35,241 if you are filing a joint return or $33,241 if you are single or filing separately. If you have no children the maximum amount is $35,241 for joint returns and $12,590 if you are single or filing separately. The amount of investment income that you are allowed to have and still receive the earned income credit has increased to $2,900.

The tax relief granted for victims of hurricane Katrina, Rita and Wilma has expired for the tax year 2007. Also, you cannot claim the qualified electric vehicle credit.

Your may qualify to deduct 10 percent of your mortgage insurance premiums for 2007. The new tax laws allow qualifying mortgage insurance premiums to be treated as mortgage interest on your Schedule A.

The maximum amount of taxable social security wages has increased to $97,500 under the new tax laws for 2007.

Deductible mileage has increased to 48.5 cents per mile for business related miles. The deductible mileage allowed for qualifying medical or moving related trips has increased to 20 cents per mile. To make sure that you get the most out of the 2007 tax law changes you may want to consider using a qualified income tax preparer or having your income tax return prepared by an online income tax service.

Additional information of interest that was not included in the top 7 tax law changes applies to individuals and married filers of forms 1040, 1040A and 1040EZ. The standard deductions have been increased to $5,350 for single or married filing separately and $10,700 for married filing jointly. If you file as head of household (single with one or more dependents), the standard deduction is $7,850. If you are over the age of 65 or blind, you can add an additional $1,300 to your standard deduction and an additional $1,050 if you file a joint return and your spouse is also blind or over 65. If your itemized deductions are more than the standard deductions you will want to use the itemized deductions instead.