2008 Tax Law Changes (Part 5)
2008 Tax Law Changes, continued
New Form for Tuition and Fees Deduction. Beginning in 2007, in order to claim the tuition and fees deduction, you must complete Form 8917, Tuition and Fees Deduction, and file it with Form 1040 or Form 1040A. Previously, a worksheet was provided to help taxpayers figure the amount of the deduction.
Student Loan Interest Deduction. For 2008, the amount of the student loan interest deduction is phased out if your filing status is married filing jointly and your modified adjusted gross income (MAGI) is between $115,000 and $145,000. You cannot take the deduction if your MAGI is $145,000 or more.
For all other filing statuses, your student loan interest deduction is phased out if MAGI is between $55,000 and $70,000. You cannot take a deduction if your MAGI is $70,000 or more.
Exclusion of Income for Volunteer Firefighters and Emergency Medical Responders. For tax years beginning after 2007 and before 2011, gross income does not include, and therefore, does not need to be included on your tax return:
1. Rebates or reductions of property or income taxes provided by a state or local government for providing services as a member of a qualified emergency response organization. Any such rebate or reduction reduces the amount of the income tax deduction for such taxes.
2. Qualified payments made by a state or local government for providing services as a member of a qualified emergency response organization. The exclusion is limited to $30 multiplied by the number of months the member performs such services. A charitable deduction for expenses paid by the member in connection with performing such services must be reduced by any payment excluded from income.
A qualified volunteer emergency response organization is any volunteer organization organized and operated to provide firefighting or emergency medical services for persons in a state or local jurisdiction and required by written agreement with that state or local jurisdiction to furnish such services.
Continued next week
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