New tax laws that save you money

By Melissa Maynarich, News 9

You may have more money in your own pocket book this year, even though economic forecasters are speaking of a slow down in Oklahoma's economy in 2008.

For Oklahoma's new year, there's a new package of tax cuts that will go into effect.

Several bills passed by the Oklahoma legislature are now laws and are changing the tax code when it comes to your earnings in '08.

The most significant change, a decrease in the top state income tax rate from 5.65 percent to 5.5 percent.

Moore Republican Representative Randy Terrill says the cut applies to everyone earning more than $10,000 a year.

"The reductions in top marginal income tax rates do benefit people who earn more, but at same time the increase in standard deduction benefit middle and lower income families who do not itemize," Terrill said.

When taxpayers file this April, the state's standard deduction for those who do not itemize increases.

The standard deduction for married couples filing jointly will be $5,500, an increase from $3,000. For those filing as single and or married filing separately, the amount of the standard deduction will increase from $2,000 to $2,750. Deductions will rise again in 2008.

"There are whole lot of Oklahoma taxpayers that do not itemize," Terrill said. "They just claim the standard deduction and we have slowly but surely been increasing that."

In 2008, the death tax changes. When a person dies, the death tax will only apply to those whose assets are greater than two million.

"Any time we have significant government surpluses, it's been our policy that some portion of that surplus be returned to taxpayers in the form of tax cuts," Terrill said.

Also in effect this year, the implementation of a new tax credit for stay-at-home parents estimated at about $60 per child.