Additional Child Tax Credit
Exemption Amount Increase
Standard Mileage Rates
Nonbusiness Energy Property Credit
Qualifying Child and Qualifying Relative
Additional Child Tax Credit
The credit limit based on earned income increased to 15% on earned
income in excess of $11,700. This is an increase from 2005
when the credit limit was based on earned income in excess of
$11,300.
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Exemption Amount Increase
The amount you can deduct for each exemption has increased from $3,300 in 2006 to $3,400 in 2007.
You lose all or part of the benefit of your exemptions if your adjusted gross income is above a certain amount; that amount depends on your filing status. For 2007, the phaseout begins at:
• $117,300 for married persons filing separately
• $156,400 for single individuals
• $195,500 for heads of household
• $234,600 for married persons filing jointly
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Standard Mileage Rates
For 2007, the standard mileage rate for the cost of operating your car is 48.5 cents per mile for all business miles driven.
For medical and moving miles driven, the rate is 20 cents per mile for 2007. If the miles are charitable miles, the rate is 14 cents per mile (unless the miles are related to Hurricane Katrina, at which point the rate is 32 cents per mile).
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Nonbusiness Energy Property Credit
Individuals can claim a tax credit in 2007 for the cost of qualified home improvements that increase the energy efficiency of a primary residence. The credit has a $500 lifetime maximum with certain expenditure types falling below the $500 lifetime maximum.
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Qualifying Child and Qualifying Relative
The IRS is using the terms qualifying child and qualifying relative when determining who is eligible for head of household filing status, dependent exemptions, as well as the Earned Income, Child Tax and Child and Dependant Care credits.
There are specific rules used to determine who meets the definition of a qualifying child or qualifying relative. Taxpayers should be sure to apply these rules, step by step, before deciding to file as Head of Household, including someone as a dependent or taking one of the credits mentioned above.
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