Jim Beddow

Congress Passes Late Tax Bill

Congress passed a tax bill on December 19, 2007 that affects 2007 taxes. The IRS has said that any tax return that has Alternative Minimum Tax forms attached will not be processed until mid-February.

Use Electronic Filling for Payroll Tax Deposits

The Electronic Federal Tax Payment System (EFTPS) works well. The IRS will draft your payments directly from your bank account. During the enrollment process, you get a chance to place limits on the amount of the deposits. Enroll at www.eftps.com. Enrollment is easy. You'll need your bank routing and account numbers. After enrollment you'll receive all the necessary information in the mail in 7 to 10 days. The IRS is not automatically sending tax deposit coupon books in order to encourage people to electronically file. You save time driving to the bank. The only downside is that you have to process your deposit a day before it's due, but the money won't be drafted until the next day.

The IRS is hassling people that try to obtain blank coupons at local offices. Clients have complained about the Smyrna, GA office requiring proof of a federal payroll tax liability before providing blank Form 8109. They will not give out a blank form, but will write the business name and employer identification number on the form.

FICA Wage Base Increase

The FICA wage base has increased to $102,000 for 2008. Quickbooks tax tables will handle this change for you.

Deduction for Vehicle Contributions

An individual's deduction for a vehicle contribution to charity will depend on the use the charity makes of the vehicle. If they sell it without any intervening use or material improvement of the vehicle, the individual's deduction is limited to the amount the charity received for the vehicle. The IRS commissioner is charged with writing the definitions of "intervening use" and "material improvement".

Mileage Rate Increase for 2008

IRS Revenue Procedure increases the mileage rate for business mileage from $.485 per mile to $.505 per mile effective January 1, 2008. The charity mileage rate for 2008 is $.14 per mile. Medical and moving mileage is deductible at $.19 per mile.