Increased AMT Exemption

A section of the Emergency Economic Stabilization Act of 2008, referred to as the "AMT patch", raises the exemption amounts to $46,200 (individuals) and $69,950 (married filing jointly) for 2008. The AMT patch also extends (through 2008) tax relief for nonrefundable personal credits taken by taxpayers to reduce their liability under the AMT.

Credit for First Time Homebuyers

Included in the Emergency Economic Stabilization Act of 2008, if you purchase your first home between April 9, 2008 and June 30, 2009, you may qualify for this credit. Eligible taxpayers may receive up to a maximum of $7,500 from the United States government, which can be repaid over a 15 year period at a rate of $500 per year, interest-free. (Note: The ''American Recovery and Reinvestment Act of 2009'', which is now headed to the Senate for a vote, waives the repayment requirement. Read the first article in this month's enewsletter for more information.)

Increased Contribution Limits for IRAs

The tax rules permit taxpayers to contribute to traditional IRAs and Roth IRAs if their income falls within certain parameters. If your income is too high, you are limited in these contributions. All of the limits increased for 2008, which means taxpayers with higher income might still be able to contribute.

Tax Breaks for Midwest Disaster Areas

Tax breaks are available for some Midwest residents affected by storms that occurred between May 19 and August 1, 2008 Provisions include reduced limitations on deductions for casualty losses and charitable contributions, as well as a possible exemption to those who provided housing to storm victims.

Revised Standard Mileage Rate

The standard mileage rate for business use of your vehicle was 50.5 cents per mile for the first six months of 2008, and 58.5 cents per mile for the rest of the year. The rates also changed for miles driven for medical reasons or charitable purposes.

Reduction in Lowest Capital Gains Rate

Those with lower incomes will benefit from a reduction in the lowest capital gains rate. The formerly 5% rate for married taxpayers with income under $65,100 and single taxpayers with income under $32,500 has now been reduced to 0%.

Recovery Rebate Credit

If you were ineligible to receive the economic stimulus payment in 2008 (or received only a partial amount of the $600--$1,200 for married filing jointly, plus $300 for each qualifying child), you might still be able to get that money. The initial payments were based on your 2007 income, which may have made you ineligible. Now you can used your 2008 income to effectively collect the credit. .

Change in "Kiddie Tax"

The "kiddie" tax amount has increased to $1,800 for unearned income of a child under 18 years of age; if the earned income of the child does not exceed half their support, age 19 or, if a full-time student, under age 24. Children with investment income exceeding $1,800 must be taxed at the parent's tax rate to avoid evading income taxes by shifting investments to children.