Colorado Springs Financial Briefs: November 2, 2007

The nation's banking associations have said that Congress should place burdens on non-bank mortgage lenders to prevent another subprime lending crisis -- rather than impose greater restrictions on banks.

The American Bankers Association and America's Community Bankers have urged Congress to require mortgage lenders to place greater emphasis on a borrower's ability to repay and to hold non-bank mortgage lenders to the same standards as banks.

In testimony before the House Financial Service Committee, ABA Chairman Bradley E. Rock also asked that any proposed bill not create additional regulatory burdens on banks, warning that doing so would inevitably impede all types of lending.

"The damage caused by deceptive or unscrupulous sales practices hurts us all," Rock said.

He also expressed concern about the impact a bill would have on the secondary market for mortgage loans.

"Access to credit at the lowest cost relies upon an effective and efficient secondary market for mortgages," Rock said.

IRS expands tax benefits for 2008

The Internal Revenue Service has announced that tax brackets will widen, standard deductions and personal exemptions will increase, and Individual Retirement Account and 401(k) limits will rise.

In compliance with federal laws, more than three dozen tax benefits have been revised for inflation adjustment in 2008.

IRS Field Examination Group Manager Lee Deering said the local IRS office offers walk-in service from 8 a.m. to 4:30 p. m. Mondays through Fridays.

"We have people on staff in a position to answer questions regarding the status of a taxpayer's account," he said. "We also accept payments, estimated payments and file returns. And during file season, we have limited tax return preparation based on income levels."

Taxpayers may also call (800) 829-1040 or visit www.irs.gov for tax preparation assistance.

Some of the key tax changes for 2008:

The value of each personal and dependency exemption, available to most taxpayers, is $3,500, up $100 from 2007.

The new standard deduction is $10,900 for married couples filing a joint return (up $200), $5,450 for singles and married individuals filing separately (up $100), and $8,000 for heads of household (up $150).

Tax-bracket thresholds increase for each filing status. For a married couple filing a joint return, for example, the taxable- income threshold separating the 15-percent bracket from the 25- percent bracket is $65,100, up from $63,700 in 2007.

The maximum earned income tax credit for low- and moderate- income workers and working families with two or more children is $4,824, up from $4,716. The income limit for the credit for joint return filers with two or more children is $41,646, up from $39,783.

The maximum Hope credit, available for the first two years of post-secondary education, is $1,800, up from $1,650 during 2007.

The contribution amount allowed for Roth IRAs begins to phase out for joint filers with incomes exceeding $159,000 (up from $156,000), and $101,000 (up from $99,000) for singles and heads of household.

For contributions to a traditional IRA, the deduction phase-out range for an individual covered by a retirement plan at work begins at $85,000 for joint filers (up from $83,000) and $53,000 for a single person or head of household (up from $52,000).

The annual contribution limit for most defined-contribution plans rises to $46,000, up from $45,000 in 2007.

Air Academy offering 6.01 percent APY checking

Air Academy Federal Credit Union has unveiled MAX checking: a free, personal checking account, with no minimum balance, which earns a 6.01 percent annual percentage yield on accounts with balances of $50,000 or less.

Members must make at least 12 signature-based check card transactions and have one direct deposit or automatic debit payment each month, in addition to receiving statements electronically to qualify.

Vice President of Marketing Karin Kovalovsky said that members increase the efficiency of the credit union when they use free services such as online banking, e-mailed statements and debit cards instead of checks.

"We want to reward members for using electronic services," she said.

Rebecca Tonn covers banking and finance for the Colorado Springs Business Journal.

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