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Letter to the editor

IRS makes adjustments to ease sting of inflation

But you likely won't see the changes till 2009.

By Times wires
Published October 20, 2007

SAN FRANCISCO - Inflation isn't as certain as taxes, but it's still likely. The IRS' annual adjustments will help to ease that inflation bite.

When taxpayers file their 2008 tax returns, they'll enjoy higher personal exemption amounts, a higher standard deduction and wider tax brackets, meaning more money is taxed at a lower rate, the Internal Revenue Service announced Thursday.

Married taxpayers who file jointly will have a standard deduction of $10,900, a $200 increase from 2007, while the standard deduction for single filers and those married but filing separately will increase $100 to $5,450. The standard deduction for head-of-household filers jumps to $8,000, a $150 increase.

Meanwhile, personal and dependency exemptions will rise $100 to $3,500, and the upper limit of the 15 percent tax-bracket will rise to $65,100 from $63,700 in 2007 for married taxpayers filing jointly.

College students will have a higher Hope credit for the first two years: $1,800 for 2008, up from $1,650 in 2007.

For low-income and moderate-income workers with two or more children, the earned income tax credit rises to $4,824 from $4,716 in 2007, and the income limit for the credit for joint filers with two or more children rises to $41,646 from $39,783.

[Last modified October 19, 2007, 23:28:22]