mileage rate changes for 2008

Higher fuel and vehicle prices have pushed the standard mileage reimbursement rate to 50.5 cents for all business miles effective January 1, 2008.  The new rate is two cents higher than the 2007 rate of 48.5 cents-per-mile.  The standard mileage rate for moving and medical expenses, however, fell from 20 cents-per-mile to 19 cents-per-mile.  The rate for charitable deduction remains at 14 cents-per-mile.

Source:  CCH Federal Tax Weekly, November 29, 2007

upgrading computer software

You may have been getting lots of extra mail lately telling you that you should upgrade your software.  Should you upgrade?  Do you need to??  Here are a few things to think about:

• Since November, Peachtree and Quickbooks no longer support older versions of their software.  This November, both companies stopped supporting version 2005 and older.  This can be something to think about because in an instance where something might happen to your software, our office may not be able to fix the problem.
• Upgrading to a current version of the software will ensure that you are getting proper updates to your system.
• Newer versions provide many reporting improvements that make it easier and more efficient for entering and reporting data.

If you have further questions about upgrading, or would like to do so, please contact our office!

JANUARY 2008 OFFICE HOURS

Monday – 9:00 AM – 5:00 PM

Tuesday – Friday 8:00 AM – 5:00 PM

Closed daily for lunch 12:00 – 1:00 PM

4TH QUARTER & YEAR-END PAYROLL INFO DUE

Please remember to submit your 4th Quarter 2007 and Year-End 2007 payroll information (including W-2 and 1099 info) to our office no later than January 18, 2008.  Any information received after that date will incur a $100 surcharge.

LEHIGH VALLEY HALF MARATHON & 5k

Planning to make a New Year’s resolution to exercise more?  Are you looking to shed a few extra holiday pounds?  Or maybe you already enjoy a good workout?  Why not give yourself a goal for the upcoming year and register to join the Stortz team in the 2008 Lehigh Valley Half Marathon & 5K?

As the presenting sponsor for the 5K, we’d love to see you there.  Come out and join the fun!

Register @ http://www.lehighvalleyhalfmarathon.com/

emmaus 4-mile road race & 1-mile fun run

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Weekly Tax Tips

September 6, 2010
August 30, 2010
August 23, 2010
August 16, 2010

Monthly Tips

Business September 2010
Financial September 2010

UNEMPLOYMENT COMPENSATION CONTRIBUTION CHANGES

The Employee Contribution towards Unemployment Compensation will change in 2008.  The employee contribution rate has been set at 0.06% for calendar year 2008.  This is a decrease from 0.09%, which was in effect from 2004 – 2007.

Another change in 2008 is the name for taxes formerly know as Occupational Privilege Tax (OPT) and Emergency Municipal Services Tax (EMST).  This tax is now the Local Services Tax (LST) and the amount varies by locality.  If the rate is over $10.00, the amount can no longer be deducted as a lump sum.  See the resource page of our website for a listing of rates as well as the guidelines for the deduction.

END-OF-YEAR STOCK SALES

If you dumped your losing stocks at the end of 2007 – here’s some information you might want to have on hand. 

Capital losses can offset all your gains and up to $3,000 of other income.  Excess losses are carried forward – but don’t sell just for tax reasons! 

Look out for the “wash-sale” rule – it bars deducting a loss if you buy the identical securities up to 30 days before or after a sale.  Any suspended loss is added to the tax basis of the replacement security.  Selling close to the date that mutual fund dividends are reinvested can also trigger this rule, and you may be nabbed if you use your IRA to quickly buy back stock that you sold at a loss.  You’re OK, however, if you sell one mutual fund and buy another with similar investment goals.

It can also affect bond “swaps”.  If you sell bonds at a loss and reacquire bonds of the same issuer, you can avoid the wash-sale rule by purchasing ones that have different maturities or interest rates.

Source:  The Kiplinger Letter, November 16, 2007

DEDUCTING MORTGAGE INSURANCE PREMIUMS

If you entered into a mortgage insurance contract between January 1 and December 31, 2007, you may be able to deduct the premiums on your 2007 personal income tax return.

Important notes:

• The deduction only applies to mortgages which closed in 2007.  If you have a loan with mortgage insurance in 2006, you won’t be able to deduct the premiums unless you refinanced in 2007.
• There are income limits.  You get the full deduction if your adjusted gross income is $100,000 or less.  The amount you can deduct phases out rapidly after that, and no deduction is available if you make more than $110,000.
• This deduction only applies to the 2007 individual tax return.

Feel free to contact your tax preparer if you have any questions regarding this new deduction!

Source:  www.irs.gov

CERTAIN PAYMENTS TO DISABLED VETERANS RULED TAX-FREE; SOME MAY BE DUE REFUNDS

Payments under the Department of Veterans Affairs (VA) Compensated Work Therapy (CWT) program are no longer taxable and disabled veterans who paid tax on these benefits in the past three years can now claim refunds, the Internal Revenue Service said today.

Recipients of CWT payments will no longer receive a Form 1099 from the Department of Veterans Affairs. Disabled veterans who paid tax on these benefits in tax years 2004, 2005 or 2006 can claim a refund by filing an amended return using IRS Form 1040X. According to the VA, more than 19,000 veterans received CWT in Fiscal Year 2007.

The IRS agreed with a U.S. Tax Court decision issued earlier this year, which held that CWT payments are tax-free veterans’ benefits. In so doing, the agency reversed a 1965 ruling which held that these payments were taxable and required the VA to issue 1099 forms to payment recipients.

According to the VA, the CWT program provides assistance to veterans unable to work and support themselves. Under the program, the VA contracts with private industry and the public sector for work by veterans, who learn new job skills, re-learn successful work habits and regain a sense of self-esteem and self-worth.

Source:  www.irs.gov