Some Changes to 2007 Tax Laws

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Charitable contributions

To receive a deduction for charitable contributions, you must have a record of any cash contributions you made to a charity in 2007. The record could be a canceled check, copy of a canceled check, a bank statement that shows the date, amount and name of the charity, or a letter from the charity showing the amount and date.

Earned income tax credits

The earned income amount for the additional child tax credit increased to $11,750. The earned income credit amount for one qualifying child has increased to $2,853. If you have more than one child the maximum earned income credit is $4,716, and $428 for no children. The maximum earned income amount has also increased to $39,783 if you are married and filing a joint tax return or $37,783 if you are single or filing separately with more than one child. If you have only one child, the maximum earned income amount is $35,241 if you are filing a joint return, or $33,241 if you are single or filing separately. If you have no children the maximum amount is $35,241 for joint returns, and $12,590 if you are single or filing separately. The amount of investment income that you are allowed to have and still receive the earned income credit has increased to $2,900.

Other credits

Tax relief granted for victims of hurricanes Katrina, Rita and Wilma has expired for the tax year 2007. Also, the qualified electric vehicle credit cannot be claimed.

Mortgage insurance premiums

You may qualify to deduct 10 percent of your mortgage insurance premiums for 2007. Qualifying mortgage insurance premiums can be treated as mortgage interest on your Schedule A.

Taxable Social Security wages

The maximum amount of taxable Social Security wages has increased to $97,500 for 2007.

Mileage deductions

Deductible mileage has increased to 48.5 cents per mile for business related miles. The deductible mileage allowed for qualifying medical or moving related trips has increased to 20 cents per mile.

Standard deductions

There are also changes that apply to individuals and married filers of forms 1040, 1040A and 1040EZ. Standard deductions have been increased to $5,350 for single or married filing separately, and to $10,700 for married filing jointly. If you file as head of household, single with one or more dependents, the standard deduction is $7,850. If you are over the age of 65 or blind, you can add an additional $1,300 to your standard deduction and an additional $1,050 if you file a joint return, and your spouse is also blind or over 65. If your itemized deductions are more than the standard deductions you will want to use the itemized deductions instead.