WASHINGTON – The new standard deduction for married couples filing a joint income tax return will rise $400 to $10,700 next year following inflation adjustments announced by the Internal Revenue Service Thursday.
The IRS said the deduction for singles and married individuals filing separately will go up $200 to $5,350 and for heads of household up $300 to $7,850.
The changes will affect 2007 returns, filed by most taxpayers in 2008.
Among other inflation adjustments, the value of each personal and dependency exemption, available to most taxpayers, will increase $100 from the 2006 level of $3,300.
Tax bracket thresholds will also shift as a result of inflation. The taxable-income threshold separating the 15-percent bracket from the 25-percent bracket for a married couple filing a joint return will go from $61,300 in 2006 to $63,700.
The income limits applying to the retirement savings contributions credits and contributions to some IRA plans will also rise for the first time in 2007 due to inflation adjustments.
Talk to us
> Give us your news tips.
> Send us a letter to the editor.
> More Herald contact information.
