Kiplinger has the estimated tax savings you’re likely to see for the 2007 tax year (when you file in April 2008). Here are the estimated tax brackets, take a look to see where you fall:
These are just the estimated numbers. The IRS will release the official numbers in December. Here are more estimations from Kiplinger:
- The personal exemption — which you claim for yourself and each dependent — will rise to $3,400, up $100 from the 2006 level.
- The standard deduction — which is used by nearly two-thirds of all taxpayers — will increase for each filing status. Singles will enjoy a $200 hike, to $5,350 from this year’s $5,150. Married couples filing jointly will see their standard deduction rise to $10,700, $400 more than they will claim on 2006 returns. The standard deduction for heads of household who do not itemize deductions will increase $300, to $7,850 on 2007 returns.
- The tax brackets will become broader; meaning more of your income will be taxed at lower rates. The 10% bracket on 2007 joint returns, Kiplinger estimates, will cover the first $15,650 of taxable income. That’s $550 more than in 2006. Taxing that amount at 10% rather than 15% will save couples $27.50. The higher your income, the more you save as more dollars fall into lower brackets. As the top of the 15% bracket rises, for example, some income that used to be taxed at 25% will be hit by the 15% rate.
But wait, there’s more! Check the article on Kiplinger for information on changes to the itemized deduction and personal exeption phase-out amounts as well as Social Security limits.