Sharon Losnick, CPA - Certified Public Accountant

TAX LAW CHANGES FOR 2007

	Exemption Amount Increased - The amount you can deduct for each exemption has increased to $3,400 in 2007.
	Standard Deduction Amount Increased - The basic standard deduction amounts for 2007 are: Head of household — $7,850 Married taxpayers filing jointly and qualifying widow(er)s — $10,700 Married taxpayers filing separately — $5,350; Single — $5,350 Over 65 - Married taxpayers get an additional $1,050; Single - $1,300
	Tax Brackets Have Become Broader - This means that more of your income is taxed at a lower rate.
	Itemized Deduction Phase-Out - taxpayers begin to lose the value of their itemized deductions after taxable income passes $156,400 in 2007. They are reduced by 2% of the amount your Adjusted Gross Income is greater than $156,400. However, you cannot lose more than 80% of your deductions.
	Personal Exemption Phase-Out - the income level at which you lose the value of your personal exemptions has risen to $156,400 for Single taxpayers; $195,500 for Heads of Households and $234,600 for Married taxpayers. They are reduced by 2% of each $2,500 over these limits, but the reduction cannot exceed $2,200.
	Higher Limits for Deductible IRAs - you can take a full IRA deduction if your adjusted gross income is less than $52,000 (Single, Head of Household) or $83,000 (Married Filing Jointly). A partial deduction is allowed for incomes up to $72,000 (Single, Head of Household) and $103,000 (Married Filing Jointly).
	New Roth IRA Limits - ability to contribute to a Roth IRA is phased out as your modified adjusted gross income rises between $99,000 to $114,000 (Single, Head of Household) and $156,000 to $166,000 (Married Filing Jointly).
	Alternative Minimum Tax (AMT) - Congress approved a last-minute 1 year patch that will prevent about 23 million new taxpayers from being hit by the AMT.