Tax Report

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Changes for 2008 Help
Higher-Income Taxpayers
By TOM HERMAN


Upper-income taxpayers stand to benefit the most from tax-law changes that became effective Jan. 1, including one that will allow many people to keep more of their personal exemption amounts and itemized deductions.

Yet many other taxpayers could face higher taxes this year if Congress fails to extend a number of popular provisions -- and if it doesn't act to protect millions of people from getting caught in the web of the alternative minimum tax.

Among the notable changes: Most taxpayers will get a mild dose of relief because of annual inflation adjustments that increased tax-related limits and other numbers, including income thresholds. Higher-income Americans who live and work abroad will be helped by an annual inflation adjustment enabling them to shield more of their pay from U.S. income tax.

Many widows and widowers will have more time to sell their home and still qualify for the maximum amount of gain that may be excluded from federal income tax. Separately, many lower-income investors will be eligible for a special break this year on capital gains and dividends.

http://online.wsj.com/article/SB119984133951376509.html?mod=home_personal_journal_left
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