Tax Help
Mileage Rates
Mileage Rate increases to 58.5 cents per mile.
The increased gas prices have a major impact on individuals who use their automobile for business use. The new standard business mileage reimbursement rate for July 1, 2008 - Dec. 31, 2008 is 58.5 cents. This rate is used as an option to compute deductible business related automobile costs. (If you are using your automobile for private and business use). The alternative method is tracking actual automobile costs.
Tax Audit
According to the IRS the total number of audited individual tax returns increased by 7 percent to 1,384,563 in 2007 from 1,293,681 in 2006. That’s the highest number since 1998. Good tax record keeping is important in case you get audited. Don’t forget to print off (either as a hard copy or PDF file) your 2007 tax return and keep a copy for your records. On efile.com you can print your return free of charge until December 2008. After that we will close to prepare for the new tax season.
Economic Stimulus Payments
August 28, 2008
The US Treasury Dept. began sending economic stimulus payments in April 2008. Payments will continue to be issued by the IRS through 2008 for returns filed after April 15. You should wait 8-12 weeks after filing your return before you check on the status of your stimulus payment.
New Electronic PIN Signature Requirement Begins in 2008
WASHINGTON - The Internal Revenue Service will simplify the signature process for electronically filed individual income tax returns submitted by tax practitioners. The simplification eliminates the need for a paper signature document to be sent to the IRS in support of electronically filed tax returns.
Beginning with the 2008 filing season, tax practitioners can efile individual income tax returns only if the returns are signed electronically using one of two methods: either a Self-Select Personal Identification Number (PIN) or a Practitioner PIN.
New Online Employer Identification Number Application Processes Requests in Minutes
Taxpayers can now request an Employer Identification Number (EIN) through a Web-based system that instantly processes requests and generates identification numbers in real time, the Internal Revenue Service announced today.
"This new and improved online application will reduce the time it takes taxpayers to get an EIN," said Richard Morgante, Commissioner of the IRS Wage & Investment Division. "Essentially they can get one while they wait -- within minutes."
Several Hybrid Automobile Models Still Qualify for Tax Credit
WASHINGTON - The Internal Revenue Service announced that purchasers of qualified hybrid vehicles may continue to claim the Alternative Motor Vehicle Credit.
$110 Million in Refund Checks Looking for a Home
The IRS is looking for 115,478 taxpayers who are due refund checks worth about $110 million after the checks were returned as undeliverable.
The refund checks, averaging about $953, can be claimed as soon as taxpayers update their addresses with the IRS. Some taxpayers have more than one check waiting.
Plan Now to Get Full Benefit of Saver's Credit; Tax Break Helps Low- and Moderate-Income Workers Save for Retirement
Low- and moderate-income workers can take steps now to save for retirement and earn a special tax credit in 2007 and the years ahead, according to the Internal Revenue Service.
The saver's credit helps offset part of the first $2,000 workers voluntarily contribute to IRAs and to 401(k) plans and similar workplace retirement programs. Formally known as the retirement savings contributions credit, the saver's credit is available in addition to any other tax savings that apply.
Poker Tournament Winnings Must be Reported to the IRS
Starting next year (2008), casinos and other sponsors of poker tournaments will be required to report most winnings to winners and the Internal Revenue Service, according to the IRS.
The new requirement, which goes into effect on March 4, 2008, was contained in guidance released Sept. 4 by the Treasury Department and the IRS. The guidance is designed to clear up confusion about the tax reporting rules that apply to poker tournaments. In recent years, some casinos and players have been confused over whether poker tournament sponsors who hold the money for participants in a poker tournament are required to report the winnings to the IRS and withhold tax on the winnings.
2008 Inflation Adjustments Widen Tax Brackets, Raise IRA/401(k) Limits and Expand Tax Benefits
For 2008, personal exemptions and standard deductions will rise, tax brackets will widen and workers will be able to save more for retirement, thanks to inflation adjustments announced today by the Internal Revenue Service.
By law, the dollar amounts for a variety of tax provisions must be revised each year to keep pace with inflation. As a result, more than three dozen tax benefits, affecting virtually every taxpayer, are being adjusted for 2008.
IRS Announces Pension Plan Limitations for 2008
The IRS announced cost of living adjustments applicable to dollar limitations for pension plans and other items for Tax Year 2008.
Section 415 of the Internal Revenue Code provides for dollar limitations on benefits and contributions under qualified retirement plans. It also requires that the Commissioner annually adjust these limits for cost of living increases.
Special Web Section Unveiled for Homeowners Who Lose Homes; Foreclosure Tax Relief Available to Many
The IRS reassured homeowners that, although mortgage workouts and foreclosures can have tax consequences, special relief provisions can often reduce or eliminate the tax bite for financially strapped borrowers who lose their homes.
For those taxpayers who find they owe additional tax, it also includes a form they can use to request a payment agreement with the IRS. In some cases, eligible taxpayers may qualify to settle their tax debt for less than the full amount due using an offer-in-compromise.
Back-to-School Tax Breaks Help Teachers Pay Classroom Costs; Aid Parents, Students With College Tuition
The IRS reminded teachers, parents and students that saving receipts and keeping good records can help them take advantage of various education-related deductions and credits on their 2007 federal income tax return.
"The start of the school year is a good time to remind parents, students and teachers to save all receipts related to tax-advantaged education expenses," said IRS Acting Commissioner Linda Stiff. "Good recordkeeping makes sense because it can help avoid missing a deduction or credit at tax time."
IRS Warns of New Email Scams
The IRS alerted taxpayers to the latest versions of an email scam intended to fool people into believing they are under investigation by the agency's Criminal Investigation division.
The email purporting to be from IRS Criminal Investigation falsely states that the person is under a criminal probe for submitting a false tax return to the California Franchise Board. The email seeks to entice people to click on a link or open an attachment to learn more information about the complaint against them. The IRS warned people that the email link and attachment is a Trojan Horse that can take over the person's computer hard drive and allow someone to have remote access to the computer.
IRS to Waive Estimated Tax Penalty for U.S. Citizens or Residents Living and Working Abroad
The IRS and U.S. Treasury announced that they have released guidance on the estimated tax penalty for citizens or residents of the United States living and working abroad.
The Tax Increase Prevention and Reconciliation Act of 2005, Pub. L. No. 109-222, 120 Stat. 345 (TIPRA), enacted in May 2006, changed the maximum amount of foreign earned income and housing costs that may be excluded from gross income under section 911 of the Internal Revenue Code.
Information provided is thought to be reliable but is not guaranteed to be accurate.