0% Capital Gain Tax Rate   
The biggest change that will probably affect the most people is the new 0% capital gains tax rate.  
If you are here on the website please go back to the home page and then click on the box that
talks about this, we have devoted an entire page to explaining how it works and how to make it
work for you.
The basics of this law is that if you are married and filing jointly and you can keep your taxable
income under $65,100 than you will be able to take advantage of this temporary tax break.  If you
are single and can keep your taxable income under $32,550 then you will be able to take
advantage also.  One of the main things to remember here is that we are talking taxable income so
when you add back in the standard deduction and the personal exemption your total income can
actually reach as high as $83,000 for those filing married jointly and $41,500 for those filing as a
single.  What the law says is that so long as you stay in the 25% tax bracket with the rest of your
income then you will pay no taxes on your capital gains.  This law is only going to be in effect for
tax years 2008-2009 and 2010, and with a change of lawmakers being sworn in this coming
January it is already rumored that the law won't last all 3 years.  So it is extremely important that
those of you who can take advantage of this break do so now.  There are many ways to lower your
taxable income in order to allow yourself to get the maximum benefit.  It is not often that we get to
turn what is normally taxable income into tax fee income or when we get a chance to reset our
basis in some of our investments.  That means you could sell an investment such as stocks, bonds
or mutual funds, bring in the gain tax free, and then turn right around and buy the exact same
investment back and of course have a higher tax basis, so that when you do sell it for good some
day you will pay a whole lot less tax overall.  To fully understand and take advantage of this
temporary tax break, at the very least you need to order your copy of my free report and you
would be best served if you got with your accountant.

$7,500 Tax Credit for First Time Home Buyers
Even though this is listed as a tax credit and is a great thing for those who can take advantage of
it, in actuality it is going to work more as a tax free loan.  First and foremost it is important to
establish here that according to the law first time home buyers are defined as anyone who has not
owned a home in the last 3 years.  Those who are "first time home buyers" will get this 100%
refundable credit when they do their taxes. The reason it is listed as a !00% refundable credit is
because what you don't use as a credit against taxes, you will actually get the remainder as a
refund.  This law is supposed to be in effect for 2008 and 2009 for sure but is uncertain after that.  
Why i say it works more like a tax free loan is because 2 years after you take the credit you have
to start paying the $7,500 back over the course of 15 years.  In other words you will pay $500
more in taxes for 15 years.  In this case even if you don't owe any other taxes you will have to pay
the $500 each year.  As I said it's still a good idea because it provides cash in the early years and
the interest and real estate tax deductions will more than make up for the extra $500 in taxes in
later years.  As always make sure you know all the rules before you take advantage of this
especially if there is a good chance that you will not stay in that home for the entire 17 years.

Deduction for Real Estate Taxes Even if You Don't Itemize
For those who own their home and take the standard deduction, they will also be able to deduct all
or part of their property taxes paid this year on top of their standard deduction.  It will be a line item
on the Form 1040 this year and at the moment is set to expire after this year.  So it very well could
be a one year only tax break so make sure that you and/or your accountant don't miss this one.
The deduction will be capped off at $1,000 for married people and $500 for singles.

Direct Rollovers from 401k Plans to Roth IRA's
This used to be a two step process, a person used to have to first roll over the proceeds to a
traditional IRA and then convert that to a Roth.  Now it can be done all in one step.  

The Stimulus Package is not Over Yet
For the people who did not receive the full amount of the stimulus package but would qualify for
the full amount on their 2008 income, they will be able to take the difference as a credit on their
2008 return.  So if you did not get the full amount I hope you kept the little letter the government
sent you stating the amount that you did get and explaining why you did not get the full amount.  
As usual this is going to be an easy one to figure out, from what I hear it will take a 29 line
worksheet to figure out the credit.  It will work for people who did not get the full amount and either
made more money or had a baby in 2008.

Mileage Rate Changes
For the final 6 months of 2008, business mileage rate has been increased to 58.5 cents per mile.  
For medical and moving expenses the rate increases to 27 cents per mile.  However, the mileage
rate for charitable miles has not changed and remains at 14 cents per mile.

A Few Other Notes
If you are thinking of buying a hybrid to help beat the high gas prices, make sure you check on the
IRS website or an account, if you are thinking you are also going to get a large tax credit.  Many of
the credits for hybrid cars are no longer available.
After 2008  turning a second home into a main home so as to be able to sell 2 years later and not
pay any capital gains taxes is going to change.  Check with your account if you are planning on
doing this so as to avoid any big nasty surprises later on.
Credit card issuers will have to start sending out 1099's to the merchants which tells the IRS how
much in sales businesses should be claiming.  Where this is going to make a big difference is
people running home businesses using pay pal and similar type accounts, so make sure you are
keeping good records.
Last but not least there are a lot of specialty business credits so make sure if you own or run a
business that you ask your accountant if there are any that may apply to you.

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VEJROSTEK TAX AND FINANCIAL
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2008 TAX LAW CHANGES