Importance of 2008 Tax Limits : Rodman & Rodman

By: Nancy Sheerin

Rodman & Rodman has outlined the new limits and changes (due to laws that have passed) to Social Security, pension limits, various deduction limits, and so forth to help taxpayers better plan for 2008.

&bullThe maximum earnings subject to Social Security tax will increase to $102,000 for 2008, up from $97,500 in 2007. This means that the withholding tax for Social Security will reach a maximum of $6,324 in 2008 (up from $6,045 in 2007).
&bullSocial Security Income (SSI) benefits will increase by 2.3%.
&bullElective deferrals for 401(k) plans, 403(b) annuities and SEPs remain unchanged for 2008 at $15,500. Catch-up contributions for individuals age 50 and over also remain at $5,000 for 2008.
&bullElective deferrals that an employee/participant may elect to defer under a SIMPLE plan will remain at $10,500 in 2008. Catch-up contributions also remain unchanged at $2,500 for 2008.
&bullThe limit on total annual contributions to defined contribution plans will increase from $45,000 to $46,000 for 2008.
&bullThe limit for annual contributions to both traditional Individual Retirement Accounts (IRAs) and Roth IRAs increases from $4,000 in 2007 to $5,000 in 2008. For those 50 and over, the contribution increases from $5,000 in 2007 to $6,000 in 2008.
&bullFor 2008 an employee will be able to exclude up to $220 a month for qualified parking expenses (up from $215 in 2007), and up to $115 a month of the combined value of transit passes and transportation in a commuter highway vehicle (up from $110 in 2007).
&bullThe annual estate tax exclusion in 2008 is unchanged from 2007 at $2,000,000.

With 2007 tax season just ahead, take advantage of Rodman & Rodman's special offer of their essential reference tool, the 2007 Tax Planning Guide. This complementary guide provides tax information for individuals, investors and businesses.

Rodman's Tax Planning Guide includes information ranging from deductions, exemptions, IRAs, AMT, to capital gains and real estate taxes to fringe benefits, business losses, succession planning, tax strategies and more. Future planning, retirement and estate planning are also covered in depth.

To obtain a copy of Rodman's 2007 Tax Planning Guide, contact Lynn at (617) 965-5959 ext. 244 or email lynn@rodmancpa.com.

Rodman & Rodman, P.C.
Founded in 1961, Rodman & Rodman, P.C. provides accounting, tax and business services to small and medium-sized companies throughout New England. With a focus on strategic planning, Rodman & Rodman goes beyond traditional accounting services and takes a proactive approach when serving clients to increase, preserve and sustain clients' financial net worth. The firm has been designated as one of the top 50 firms by the Boston Business Journal.

From business valuations, taxation, audits, fraud detection and prevention services and succession planning to a variety of accounting IT services including software selection, implementation and training, the team at Rodman & Rodman serves as comprehensive advisors to clients. For individual clients, the company offers personal advisory services such as planning for real estate transactions, obtaining financing, estate planning and retirement planning. Rodman & Rodman Certified Public Accountants are located at 3 Newton Executive Park in Newton, Mass. For more information, visit their website at www.rodmancpa.com or contact Jen Reading at (617) 965-5959.

Taxes
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