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"There are many things the average person can do to lower this year'staxes," said Mark Luscombe, JD, CPA, CCH principal federal tax analyst. "Butmore than most years, many people will have to keep an eye on Washington tosee how their returns will be affected. Congress has yet to act on thealternative minimum tax exemption for 2008 and the fate of several popular taxbenefits that expired at the end of last year is up in the air. Thepresidential election adds even more uncertainty."
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As the year winds down, time is growing short for Congress to extendseveral deductions and credits. Absent new legislation, you cannot take anitemized deduction for state and local sales tax or the qualified highereducation expenses deduction, an "above-the-line" deduction valuable even ifyou can't itemize. The ability of educators to take an above-the-linededuction for school supplies expired at the end of 2007, also. Tax creditsfor many types of energy-saving home improvements ended with the 2007 taxyear, although there is a chance they will be extended before year-end.
Also uncertain is how many people will be subject to the alternativeminimum tax (AMT). In 2007, the AMT exemption, which largely determines whofalls under the alternative system, was set at $44,350 for single individualsand $66,250 for married couples filing jointly, but this year these amountsreverted to just $33,750 for individuals and $45,000 for married couplesfiling jointly. Congress is expected to enact another round of temporaryrelief, but just when that will happen and whether the relief will be enoughso that people not previously subject to the alternative tax will continue toescape its clutches is uncertain. The best bet is that the AMT will continuein something like its present form, with exemption amounts a bit higher thanthe ones in 2007, at least for the 2008 tax year.Read the full release at:http://www.cch.com/press/news/2008/20080918t.asp.
SOURCE CCH, a Wolters Kluwer business
