Which Tax Changes Can I Profit From in 2008?

Thanks to the Economic Growth and Tax Relief Reconciliation Act of 2001, you can save more of what you earn. Brush up on these tax changes:

Income taxes drop
You can make more money, and pay less in taxes if you're in the top four brackets.

IRAs
Contribution limits to traditional and Roth IRAs are $4,000 in 2007 and $5,000 in 2008. In addition, if you're 50 or older, you're entitled to a catch-up provision $1,000 in 2007 and 2008, which bumps the contribution limits up to $5,000 in 2007 and $6,000 in 2008.

Retirement plans
Elective deferral limits to certain qualified retirement plans (401(k) and 403(b)) are $15,500 in 2007 and 2008. In 2007 and 2008, the catch-up provision is $5,000, bumping the contribution limits up to $20,500 (for 2007 and 2008). The table below shows the contribution limits for these plans.

• Did You Know...?
  You can deduct job-searching expenses (such as printing, postage, and air fare) on your 1040, as a miscellaneous deduction, if those expenses exceed 2% of your adjusted gross income and if you're looking for a job in your same field. Other miscellaneous deductions (to help exceed the 2% AGI threshold) include tax preparation fees. See IRS Publication 529 for more at www.irs.gov  .

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