New tax breaks arrive in state

Louisiana taxpayers will find a few new breaks this year on state income tax returns due May 15, including a one-time break that lets residents recoup part of their homeowner’s insurance premium. Louisiana taxpayers can take a tax credit of 7 percent of the premium paid in 2008.

This year more of the excess itemized deductions on your federal income tax return can be taken off your income when filing your state income tax return. Taxpayers are allowed to take 65 percent of deductions for excess itemized deductions, or those that exceed the standard deduction of $4,500 for a single person or head of household and $9,000 for a married couple filing jointly.

The increase in the excess itemized deduction on state returns was phased in over three years, starting with a 57.5 percent allowance for 2007. The deduction will rise to 100 on returns filed for this year, reversing a change that began with the Stelly plan, which made sweeping changes to the tax law in Louisiana.

It's a bit early to say you won't have your return ready in time, but please be aware of a new requirement for obtaining a state filing extension. As of this year, taxpayers who need extra time to file their Louisiana individual income tax returns must request a specific state income tax filing extension or submit a copy of their federal
application on or before the state's May 15 due date.

For more on these and other state tax issues, visit the state Department of Revenue's Web site at www.rev.state.la.us.