PARSIPPANY, N.J., Jan. 30 // PRNewswire-FirstCall // -- New tax laws enacted in 2007 may lead to additional benefits for a range of taxpayers, according to Jackson Hewitt Tax Service(R), an industry leader providing full service individual federal and state income tax preparation.
"Changes to existing provisions and brand-new rules may help qualified homeowners, students, parents and others see additional savings when they file their 2007 taxes," notes Mark Steber, vice president of Tax Resources, Jackson Hewitt Tax Service Inc. New tax laws affecting some 2007 tax returns include:
-- Mortgage Insurance Premium Deduction: Homeowners can treat their
mortgage insurance premium paid for the year as tax deductible, if the
premium is paid on a qualifying new mortgage entered into after
December 31, 2006 and before January 1, 2011. The mortgage insurance
premium deduction could result in a possible increase in itemized
deductions. The deduction is reduced by 10 percent for each $1,000 that
annual gross income (AGI) exceeds $100,000 for couples who are Married
Filing Jointly ($500 reduction for Married Filing Separately on an AGI
of $50,000). For example, a married couple filing jointly, with a
household AGI of $101,000, paying a qualified mortgage insurance
premium of $5,000 last year, is allowed a mortgage insurance premium
deduction of $4,500. This deduction is reportable on Schedule A in the
same section as mortgage interest.
-- Mileage Rate Increases: Taxpayers who used their vehicles for
job-related purposes in 2007 can deduct $.485 per mile for business
mileage. The rate for medical and moving expenses mileage increased to
$.20 per mile.
-- Claiming Charitable Contributions: When claiming deductions for
monetary donations to a charity, new requirements apply. Even if the
contribution is less than $250, taxpayers must now have a bank record
or receipt from the organization that clearly shows the date,
organization name and amount of each donation.
-- Earned Income Tax Credit Increases: The Earned Income Tax Credit
(EITC) helps working taxpayers and families by providing a refundable
tax credit, meaning that when the EITC exceeds the amount of taxes
owed, it results in a tax refund to those who claim and qualify for the
credit. This credit is based on the taxpayer's wages, tips, salary,
income from self-employment and other taxable employee compensation.
The maximum amount of the credit available has increased in 2007 to
$2,853 for one qualifying child (up from $2,747); $4,716 for two
qualifying children (up from $4,536); and $428 for taxpayers who can
claim the credit but have no qualifying children (up from $412). In
addition, the income ceiling has also gone up. You may qualify for
some or all of the credit if you make less than the following amounts
and file as Single, Head of Household, or Qualifying Widow(er):
-- A Taxpayer claiming no children: $12,590 ($14,590 if Married
-- One qualifying child claimed: $33,241 ($35,241 if Married Filing
-- More than one qualifying child claimed: $37,783 ($39,783 if
Married Filing Jointly)
-- Standard Deduction Increases: The IRS has increased the standard
deduction amounts for those who do not itemize. Starting in 2007, the
increases are as follows:
-- For taxpayers filing as Single or Married Filing Separately:
-- For Head of Household: $7,850
-- For Married Filing Jointly and Qualifying Widow(er): $10,700
-- The additional standard deduction amount for taxpayers age 65 or
older or for blind taxpayers increases to $1,300 (for Single and
Head of Household) and to $1,050 for Married Filing Jointly,
Married Filing Separately and Qualifying Widow(er).
Jackson Hewitt has offices open around the country to help taxpayers understand the new tax laws and changes to existing provisions. To schedule an appointment with a local tax preparer or locate a nearby Jackson Hewitt office, consumers are advised to contact 1-800-234-1040 or to visit http://www.jacksonhewitt.com.
About Jackson Hewitt Tax Service Inc.
Jackson Hewitt Tax Service Inc. (NYSE: JTX) is an industry leader providing full service individual federal and state income tax preparation. Most offices are independently owned and operated. The Company is based in Parsippany, New Jersey. More information may be obtained at http://www.jacksonhewitt.com. To locate the Jackson Hewitt Tax Service(R) office nearest to you, call 1-800-234-1040.