One of the lesser talked about parts of the new housing bill is homeowners who do not itemize on their tax returns will now get the opportunity to get some credit on their 2008 federal tax return for their property taxes. Under the new guidelines, homeowners who take the standard deduction ($10,900 for married couples and $5,450 for singles) will get an additional standard deduction of $500 for single filers and $1,000 for married couples who file jointly.

It is estimated that about 40% of homeowners don’t itemize including many in less expensive homes, those with small outstanding balances owed on their homes and folks age 65 and older. They all will now be able to get an extra new tax break in addition to this year’s larger standard deduction.

Tags: IRS, new laws, taxes

For those of you not yet aware, Amendment 5 will be appearing on the November 4th ballot here in Florida. The amendment will allow voters to decide whether or not they will decrease their real estate taxes (by as much as 25%) by replacing “state required school property taxes with other state revenues.”

Once again, Lee County Property Appraiser Ken Wilkinson (Father of Save Our Homes), helped the committee that developed the new amendment and they believe its passage will “remove the unfunded mandate of required local effort from the backs of Florida taxpayers.”

Tags: Florida, legislature, taxes

On Monday, the IRS announced it is raising the automobile mileage rate that self employed individuals and business owners can claim on their tax returns. The agency said the standard rate it allows to calculate deductible operating costs for business vehicles will go up to 58.5 cents from the current 50.5 cents and will be available for use for the last six months of 2008.

Citing rising gas prices as having a major impact on individual and business finances, IRS Commissioner Doug Shulman said “given the increase in prices, the IRS is adjusting the standard mileage rates to better reflect the real cost of operating an automobile. He also said the agency wanted to get the new guidance early out so that businesses could prepare for doing mid-year adjustments beginning July 1st.

Tags: IRS, taxes

I ran across an excellent article today by David Ranson in the Wall Street Journal. It has to do with a review of economic data about the federal tax system written by Kurt Hauser. Published 15 years ago, Mr. Hauser stated “No matter what the tax rates have been in postwar America, tax revenues have remained at about 19.5% of GDP.” Ranson has dubbed it “Hauser’s Law” and laments in his article “What a pity it is that his discovery has not been more widely disseminated.”

With all the political drivel about how the wealthy have to pay their fair share or how those who have been more successful owe a duty to those who have been less so, the wealth redistribution crowd’s demands for higher tax rates just doesn’t hold water when you look at the reality of the numbers.

Tags: politics, taxes