Completax Planning, Inc.

June 2008

Another tax season has come and gone.  Thank you for your assistance, kind words and patience during this otherwise stressful period for all.

 

About the stimulus/rebate checks:   The “checks are in the mail” for all who filed a tax return by April 15^th.  For anyone who had set up direct deposit for refunds on their tax return the stimulus amount should have already been deposited to your account.  For those who did not the bulk of the checks will be sent out by July 11 according to the IRS website.

 

The rebate checks are tax free.  The rebate is based on your 2007 Adjusted Gross Income (AGI), however, in reality it is intended as a credit toward your 2008 taxes.  If, when you file your 2008 return, you are not eligible for the rebate you do not have to adjust your 2008 taxes or repay the amount.  And if, when you file your 2008 return, you are entitled to a rebate that you did not receive you will be able to get a credit for it on your 2008 return.

 

AMT: The alternative minimum tax patch for 2007 has expired.  Without another one, the number of people who will pay AMT will expand from four million in 2007 to more than 26 million in 2008.  The AMT patch will likely be delayed until very late in the year again.  The guess at this time, by most experts, is that the AMT will get patched again.  In the meantime, any tax planning we do needs to take into account the AMT existing limits.

Estate Tax:  The estate tax exclusion this year is $2 million it goes to $3.5 million in 2009.  This means that the first $2 million is not taxed, however, with the marital deduction; many estates can eliminate tax on the first spouse to die. The estate tax rate is 45%.  The annual gift tax exemption is $12,000.

 

IRS: You will soon be able to access your tax data by computer.  The IRS is planning to unveil a secure Internet portal by the end of the year.  It will let filers view and print three years of tax returns and other account information.

 

A special word of caution---the IRS does not contact people by e-mail and will never ask for confidential information through unsolicited contact.  Several clients have forwarded E-mails that are supposedly from the IRS.  Do not respond to any e-mails but rather forward them to phishing@irs.gov.  If you have any questions regarding the e-mail scam please contact us.

 

Depreciation: In 2008, the maximum amount of property a business can “expense” under IRS code section 179 (deduct in the first year of use) is $250,000.  Under the new “stimulus package” a business can deduct an additional 50% of the cost of an asset.

 

Completax: Alisha has moved into a junior accountant role with Completax Planning and is continuing her education through an online university with the goal of becoming a CPA.  Sommer Reisinger worked full time for us during the tax season answering phones and assisting clients and was a great asset. Sommer is currently attending Santa Rosa JC and also hopes to become a CPA.