Any economic stimulus payment you received is not taxable for federal income tax purposes but reduces your recovery rebate credit.taxmap/instr/i1040gi-000.htm#TXMP12e192ab
This credit is figured like last year's economic stimulus payment, except that the amounts are based on tax year 2008 instead of tax year 2007. The maximum credit is $600 ($1,200 if married filing jointly) plus $300 for each qualifying child. See the instructions for line 70 that begin on page 61.taxmap/instr/i1040gi-000.htm#TXMP4811ea29
If your economic stimulus payment was directly deposited to a tax-favored account and you withdraw the payment by the due date of your return (including extensions), the amount withdrawn will not be taxed and no additional tax or penalty will apply. For a Coverdell education savings account, the withdrawal can be made by the later of the above date or June 1, 2009. See the instructions for lines 15a and 15b, 21, and 59.taxmap/instr/i1040gi-000.htm#TXMP7b317f91
The AMT exemption amount is increased to $46,200 ($69,950 if married filing jointly or a qualifying widow(er); $34,975 if married filing separately).taxmap/instr/i1040gi-000.htm#TXMP4debf71e
You and your spouse, if filing jointly, each may be able to deduct up to $5,000 ($6,000 if age 50 or older at the end of the year). You may be able to take an IRA deduction if you were covered by a retirement plan and your 2008 modified adjusted gross income (AGI) is less than $63,000 ($105,000 if married filing jointly or qualifying widow(er)). If your spouse was covered by a retirement plan, but you were not, you may be able to take an IRA deduction if your 2008 modified AGI is less than $169,000. See the instructions for line 32 that begin on page 30 for details and exceptions.taxmap/instr/i1040gi-000.htm#TXMP0283b9df
Your standard deduction is increased by:
- Certain state or local real estate taxes you paid, and
- A net disaster loss attributable to a federally declared disaster.
See the instructions for line 39c on page 34.taxmap/instr/i1040gi-000.htm#TXMP53132bff
If you bought a main home after April 8, 2008, and before July 1, 2009, and did not own a main home during the prior 3 years, you may be able to take this credit. See the instructions for line 69 on page 61.taxmap/instr/i1040gi-000.htm#TXMP133cfca1
You can rollover distributions from an eligible retirement plan to a Roth IRA. The rollover is not tax-free. See the instructions for lines 16a and 16b for details.taxmap/instr/i1040gi-000.htm#TXMP19aa4a37
The 2008 rate for business use of your vehicle is 50 cents a mile (58 cents a mile after June 30, 2008). The 2008 rate for use of your vehicle to get medical care or to move is 19 cents a mile (27 cents a mile after June 30, 2008). taxmap/instr/i1040gi-000.htm#TXMP5e02f448
You may be able to take the EIC if:
- A child lived with you and you earned less than $38,646 ($41,646 if married filing jointly), or
- A child did not live with you and you earned less than $12,880 ($15,880 if married filing jointly).
The maximum AGI you can have and still get the credit also has increased. You may be able to take the credit if your AGI is less than the amount in the above list that applies to you. The maximum investment income you can have and still get the credit has increased to $2,950. See the instructions for lines 64a and 64b that begin on page 46.taxmap/instr/i1040gi-000.htm#TXMP43c9b0d1
You may be mailing your return to a different address this year because the IRS has changed the filing location for several areas. If you received an envelope with your tax package, please use it. Otherwise, see Where Do You File? on the back cover.taxmap/instr/i1040gi-000.htm#TXMP1ae02f94
Taxpayers with adjusted gross income above a certain amount may lose part of their deduction for personal exemptions and itemized deductions. The amount by which these deductions are reduced in 2008 is only of the amount of the reduction that otherwise would have applied in 2007.taxmap/instr/i1040gi-000.htm#TXMP7ddfb82a
The 5% tax rate on qualified dividends and net capital gain is reduced to zero.taxmap/instr/i1040gi-000.htm#TXMP0cf5a3b2
Form 8615 is required to figure the tax for a child with investment income of more than $1,800 if the child:
- Was under age 18 at the end of 2008,
- Was age 18 at the end of 2008 and did not have earned income that was more than half of the child's support, or
- Was a full-time student over age 18 and under age 24 at the end of 2008 and did not have earned income that was more than half of the child's support.
The election to report a child's investment income on a parent's return and the special rule for when a child must file Form 6251 also now apply to the children listed above.
Temporary tax relief was enacted as a result of May 4, 2007, storms and tornadoes affecting the Kansas disaster area. The tax benefits provided by this relief include suspended limits for certain personal casualty losses and special rules for withdrawals and loans from IRAs and other qualified retirement plans. For more details on these and other tax benefits related to the Kansas disaster area, see Pub. 4492-A.taxmap/instr/i1040gi-000.htm#TXMP4b0569b1
Temporary tax relief was enacted as a result of severe storms, tornadoes, or flooding affecting Midwestern disaster areas after May 19, 2008, and before August 1, 2008. The tax benefits provided by this relief include the following.
- Suspended limits for certain personal casualty losses and cash contributions.
- An additional exemption amount if you provided housing for a person displaced by the Midwestern storms, tornadoes, or flooding.
- An election to use your 2007 earned income to figure your 2008 EIC and additional child tax credit.
- An increased charitable standard mileage rate for using your vehicle for volunteer work related to the Midwestern storms, tornadoes, or flooding.
- Special rules for time and support tests for people who were temporarily relocated because of the Midwestern storms, tornadoes, or flooding.
- Special rules for withdrawals and loans from IRAs and other qualified retirement plans.
For more details on these and other tax benefits related to the Midwestern disaster areas, see Pub. 4492-B.taxmap/instr/i1040gi-000.htm#TXMP1f09ed45
The credit for nonbusiness energy property has expired and does not apply for 2008. Form 5695 is now used only to claim the residential energy efficient property credit.