We've summarized a list of the year's key tax law changes for your quick reference. Expanded college expense deductionFor students in college or families with students in college. Otherwise, the employer is subject to an excise tax. Are you withholding enough from your paycheck to cover your tax bill? Use our withholding calculator to make sure. Do not include this amount in figuring any other deduction on your return such as on Schedule A, C, E, etc. Alternative Minimum Tax exemptionFor taxpayers who might have too many deductions. Certain advanced main air circulating fans used in natural gas, propane, or oil furnaces. Start now by reviewing our planning tips covering filing status, deductions, investments, and more.

This is particularly so for those who have used the Double Trust Scheme to save inheritance tax on their family home. The maximum amount of income you can earn and still get the credit has increased. Tax-favored treatment of qualified hurricane distributions from eligible retirement plans. Nontaxable earnings from Coverdell education savings accounts. The following paragraphs explain the changes to the credit for 2007. You must reduce your qualified expenses by the following amounts. Figure any write-in adjustments to be entered on the dotted line next to Form 1040, line 36. Any course involving sports, games, or hobbies, unless such course is part of the student's degree program.

Exterior windows including certain storm windows and skylights. Car expenses and use of the standard mileage rate are explained in chapter 4 of Publication 463, Travel, Entertainment, Gift, and Car Expenses. Personal exemption moves higherAffects all members of your family. You must reduce the basis of your home by the amount of credit allowed. The credit for the first-time purchase of a home in the District of Columbia was extended through 2007. The maximum amount of adjusted gross income AGI you can have and still get the credit also has increased. Donations of cars, boats and aircraftYou can only deduct what the qualifying organization gets for selling the donation.

Saving on your tax bill is easier with some advance planning. Individuals are not the only ones required to file income tax returns. Qualified natural gas, propane, or oil furnaces or hot water boilers. Yancey consults on audit sampling and litigation support. Additional exemption for housing individuals displaced by Hurricane Katrina. Similarly, in 2008, the special five percent maximum rate on dividends of taxpayers in the 10 and 15 percent tax brackets drops to zero percent through 2010. Notices, Private Letter Rulings, AODs, GCMs, TAMs .

You could face an annual income tax charge as a penalty for carrying out such planning. Certain electric heat pump water heaters; electric heat pumps; geothermal heat pumps; central air conditioners; and natural gas, propane, or oil water heaters. Qualified expenses do not include expenses for home schooling or nonathletic supplies for courses in health or physical education. Permitted property is any obligation of the United States or any diversified investment fund approved by regulations issued by the Office of Government Ethics. Capital gains and dividend rates stay lowStrong incentives to invest and seek dividend-paying investments. Alternative Minimum Tax exemption increasesFor taxpayers who might have too many deductions. While they are subject to may of the same rules as are individual taxpayers, they are also covered by an intricate body of rules addressed to the peculiar problems of corporations. Relief granted for Hurricanes Katrina, Rita, and Wilma.