Capital Gains: For Sales of Capital Assets after May 6, 1997, the maximum Capital Gains tax rate will be generally lowered from 28% to 20%, and to 10% for taxpayers in the 15% income tax bracket. However, the lower rates do not apply to sales or exchanges of capital assets held more than one year but not more than 18 months.
Home Sales: A new provision allows a tax-free sale of your home every two year on up to $250,000 of gains ($500,000 for married couples). This provision applies to home sales after May 6, 1997.
Retirement Planning: Starting in 1998, the current deductible IRA phase-out income ranges will be increased to between $30,000 and $40,000 for single taxpayers and between $50,000 and $60,000 for married taxpayers filing jointly.
Education Credits: Beginning in 1998, you can claim a nonrefundable HOPE credit against federal income taxes up to $1,500 per student per year paid for the first two years of the student's post-secondary education in a degree or certificate program. Beginning June 30, 1998, a nonrefundable Lifetime Learning credit can be taken against federal income taxes equal to 20 percent of qualified tuition and fees incurred during the year on behalf of a taxpayer, a taxpayer's spouse or any dependents.
Student Loan Interest Deduction: A maximum deduction of $1,000 for interest on qualified education loans is allowed in 1998. This maximum will increase to $1,500 in 1999, $2,000 in 2000 and $2,500 in 2001. Deduction phase-outs apply.
THIS IS A PARTIAL LIST OF THE 1997 CHANGES. LIMITATIONS AND RESTRICTIONS APPLY. CONTACT US FOR ADDITIONAL DETAILS.
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