Tax Alerts

We provide this information, for our clients, so that our clients are alerted to issues that may affect them. Please contact us for more information.

Tax Alerts

Individuals

Qualified Residence

Mortgage insurance premiums on a personal residence are deductible for 2008.

Divorced individuals may still qualify for the $500K Sale of Residence Exclusion.

Retirement Savings

Make non deductible IRA contributions NOW and ROLL the funds into a ROTH IRA in 2010 for tax free earnings.

2008 Maximum contributions for IRA, Roth $5000, over age 50, add $1000.

Receiving a 401K distribution that includes company stock should not be rolled into an IRA. Even if there is a 10% penalty!

Non-Deductible IRA Contributions must be reported on your return.

Make sure your IRA Custodian is taking advantage of the new IRS rules for "stretch distributions" or over the life of the beneficiaries.

Inherited Property

Sale of property will have a stepped up basis and no gain if sold around date of death. A loss on the sale is Deductible!

Kiddie Tax Issues

Capital Gain Tax at the low 0% will not be available to dependents under age 24.

Charitable contribution Issues

Non-Cash property must be in "good used condition".

Any single item over $500 requires a qualified appraisal.

Must have a receipt from the organization you donated items to.

 

Investors

Retirement Plans

Earnings from Roth IRA’s, 529 Tuition Plans, and HSA’s are TAX FREE!

Make non deductible IRA contributions NOW and ROLL the funds into a ROTH IRA in 2010 for tax free earnings.

Assign a part of your tax refund to an IRA using direct deposit.

Small Businesses

Small Business Owners

IRA and HSA

Small Business OwnersConvert your IRA into your Health Savings Account in a one-time rollover in 2008. You can use the funds to pay for health expenses.

Employers can contribute to a qualified HSA plan on behalf of their employees. Distributions are tax-free if spent on medical expenses. Medical expenses include over-the-counter drugs!

Online Selling

Selling on eBay is a taxable event. IRS has determined that compliance in this area is weak and they will seek out returns using Pay Pal transaction records to audit.

A seller is obligated to collect sales tax for the state it sells from as well as local sales tax.

Deducting Expenses

Don’t have your receipt? Don’t give up! See us for help.

Business miles are the total of miles for business purpose from your Home Office! If you have a separate Office or Business site, only miles from the site, are deductible.

Per Diem is $ for Meals and $ for Lodging. Only Per Diem for Meals is allowed for Self Employed.

Closely Held Corporations

Unreasonable Compensation Tax Traps.

For C Corporations too-high compensation may reclassify compensations as dividends and dividends are non-deductible expenses.

For S Corporations too-low compensation may result in distributions being reclassified as payroll. This reclassification will subject the corporation to steep payroll tax penalties.