New Tax Laws Means New Savings For You

Published from moneycentral.com.

Every year, the Internal Revenue Service adjusts the standard deduction to account for inflation. This is the basic deduction that all taxpayers get.

But don't just take the standard deduction. Total up all your deductions every year. If the total of your itemized deductions exceeds the standard deduction, then, by all means, itemize. It will save you money.

If your deductions don't exceed the standard deduction, then don't itemize.

2007 standard deductions Filling status Amount
Married filing jointly or qualifying widow or widower
$10,700

Head of household
$7,850

Single
$5,350

Married filing separately
$5,350

2008 standard deductions Filling status Amount
Married filing jointly or qualifying widow or widower
$10,900

Head of household
$8,000

Single
$5,450

Married filing separately
$5,450

Also the standard mileage rate for automobile use for business purposes or charitable activities, or for moving or medical expenses has increased for 2008.

For 2007, the standard mileage rates are:

48.5 cents a mile for business use.

20 cents a mile for medical or moving expenses.

14 cents a mile for driving in charitable activities.

For 2008, the standard mileage rates will be:

50.5 cents a mile for business use.

19 cents a mile for medical or moving expenses.

14 cents a mile for driving in charitable activities.