Penalties for S-Corporations and Partnerships

NC Gift Tax Repeal

A repeal of the NC gift tax was signed into law July 17, 2008. However, it does not come into effect until January 1, 2009. There will not be any NC gift tax on gifts made on or after January 1, 2009.

New Option for Nonitemizers

Filers who do not itemize can deduct the state and local real property taxes they pay in 2008 in addition to their standard deduction, on their 2008 return.  The deduction is limited to $1,000 for marrieds and $500 for singles.

Options for Individuals Who Put Their Rebate Check into an IRA

The IRS has said that rebate checks can be withdrawn from an IRA free of taxes and penalties.  However, the rebate check must be withdrawn before the due date of your 2008 tax return plus any extensions.

Energy Efficient Home Credit

Contractors selling homes in 2006 may be eligible for an energy efficient home credit of up to $2000 per home.  To qualify for the $2000 credit a contractor must build a home that has a level of annual heating and cooling energy consumption which is at least 50% below the annual level of heating and cooling energy consumption of a comparable dwelling unit.  In addition building envelope component improvements alone must account for a level of annual heating and cooling energy consumption that is at least 10% below the annual level of heating and cooling energy consumption of a reference dwelling in the same climate zone.   In order to qualify a contractor must obtain a certificate from an individual who has been accredited or authorized by RESNET to perform this certification.

2008 Mileage Rates

The standard rate for business miles driven in 2008 is $.505 per mile prior to July 1, 2008.  Starting July 1, 2008 the standard rate for business miles increased to $.585 per mile.

The rate for medical and moving miles in 2008 is $.19 per mile prior to July 1, 2008 and $.27 per mile after.

The rate for miles driven in service of a charitable organization is $.14 per mile for all of 2008.

Social Security Administration Employee Verification Service

The Social Security Administration offers a telephone service to help you verify that names and social security numbers given to you by employees are correct.  You can call 1-800-772-6270 on weekdays from 7 a.m. to 7 p.m. to receive verifications for up to 5 employees at a time.  You must have your company EIN available along with SSN, last name, first name, middle initial, date of birth and gender of all employees you wish to verify.

Taxpayer Records Online

The IRS will be releasing an online system in the near future that will allow taxpayers to access and print three years worth of tax returns along with other information.

Extended Tax Breaks for Investors

The maximum rate of 15% on dividends and capital gains will stay put through 2010.  The 0% rate will stay in effect for low incomers through 2010 as well.

New Charitable Contributions Requirements

Beginning in 2007 in order to deduct a charitable contribution made in cash, by check, or by other monetary means, the contribution must be supported by a bank record or a receipt, letter or other written communication from the charity  showing the name of the donee organization, the date of the contribution, and the amount of the contribution.  If the contribution is $250 or more, donor's must receive a written receipt from the charity that includes detailed information, including a statement indicating whether or not goods or services were received in return for the contribution.