Here are the key provisions of the new tax law that are likely to impact taxpayers:
Property Tax Deduction for Non-itemizers: A new standard deduction for state and local real property taxes paid by non-itemizers. The deduction is available only for one year--for tax years beginning in 2008 and limited to $500 for single filers and $1,000 for joint filers.
New Home Buyer Credit/Loan: Individuals may credit the lesser of $7,500 or 10% of the price paid for the home against tax owed in the year of purchase. A married individual filing separately can claim a maximum credit of $3,750. The credit is really a disguised 15 year loan from Uncle Sam.
Homesale exclusion rules tightened: The new law closes a “loophole” by requiring homeowners to pay taxes on gains made from the sale of a residence for any portion of time the home may not have been used as a principal residence.
Low-income housing tax credit: This provision increases total credits available and more importantly, removes the alternative minimum tax (AMT) limit on the credit so taxpayers can use the credit to reduce the AMT tax.
