Tax News Headlines
Affecting Tax Preparation & Income Tax Planning
For the Latest Info on the 2008 Tax Rebates, Check the
IRS Web Site for
Updates!
Congress also enacted economic stimulus measures for small business,
including increased Section 179 expensing and a new 50% "Bonus"
depreciation option for business assets put into service in 2008.
Click Here for Details.
In December of 2007, Congress passed a so-called "patch" for the
alternative minimum tax (AMT) for 2007. For details on the patch,
see the
summary prepared by the National Association of Tax Professionals (NATP).
Because the bill was passed after the IRS sent 2007 tax forms to the
printer, some tax forms and related instructions are not correct. In
calculating whether you are subject to the AMT, for example, use the AMT
exemption amounts listed on the NATP summary, not the amounts shown on the
paper IRS forms or instructions.
Also in December, 2007, Congress passed the Mortgage Forgiveness
Relief Act of 2007, providing tax relief for some taxpayers who were
subject to a home mortgage foreclosure. Among the provisions of that
bill:
1. Taxpayers may exclude up to $2-million of mortgage debt
forgiveness from taxable income;
2. The exclusion applies only to a taxpayer's principal
residence;
3. The exclusion applies only to acquisition debt, not home
equity debt used for a purpose other than the purchase or substantial
improvement of the home;
4. The exclusion applies to debt discharged between January 1,
2007 and December 31, 2009 inclusive.
For more details:
Click Here for NATP Summary.
The Tax Increase Prevention and Reconciliation Act of
2005 was signed by President Bush on May 17, 2006. Among the
provisions of that bill:
1. Extension of the 15% tax rate on dividends and long-term
capital gains;
2. Increased exemptions for alternative minimum tax (AMT);
3. A 3% tax withholding rate required on many payments
from federal, state and local governments;
4. Extension of the "kiddie tax" through age 17;
5. Increase of the foreign earned income exclusion to
$82,400 for 2006, but reducing the allowed exclusion for
foreign housing costs;
6. Requires brokers to report to the IRS tax-exempt
interest paid on municipal bonds.
For more details,
Click Here for NATP Summary.
BUSINESS MILEAGE DEDUCTIONS FOR 2007 & 2008
The IRS announced the standard mileage allowance for business use of a vehicle
for 2007 is 48.5 cents per mile. For 2008 the allowance increases to
50.5 cents per mile.
IRS CONCEDES ON TELEPHONE TAX
TAXPAYERS CAN CLAIM REFUND ON 2006 RETURNS
The IRS has gave up trying to collect the 3% federal excise tax on
long-distance telephone service. Taxpayers could claim
refunds for tax paid after February 28, 2003, when they file their 2006
income tax returns. If you failed to claim the credit, you can amend
your 2006 return.
Click Here for IRS Announcement.
IRS ANNOUNCES LOWERS INTEREST RATES FOR SECOND QUARTER 2008
6 percent for overpayments (corporations 5 percent)
6 percent for underpayments
8 percent for large corporate underpayments
3.5 percent for corporate overpayments exceeding $10,000
DETAILS OF TAX BREAKS FOR THE MILITARY
Congress has added several
tax benefits for active duty service personnel as well as for members of
the reserves and National Guard over the last several years.
Details on the IRS Military Tax Page.
WATCH OUT FOR FRAUDULENT REAL ESTATE DEALS!
The Internal Revenue Service has stepped up investigations of real
estate deals with phony documents and falsified property values or buyer
loan qualification documents. Avoid any deal in which someone offers
you money under the table to sign fake documents.
IRS
News Release
