July 18th, 2008 -- Posted in Taxes |
Recognizing that the sky rocketing gas prices may be making driving more expensive, the IRS has dramatically increased the standard mileage rate for business miles.
When calculating deductions for business auto use, taxpayers can use either actual expenses, or the standard mileage rate. The mileage rate takes into consideration not only fuel prices, but maintenance and depreciation. Many taxpayers prefer using the standard mileage rate because it simplifies record keeping.
The standard mileage rate is usually adjusted for inflation at the beginning of the year. However, because of high gas prices the IRS has done a mid-year adjustment. Beginning July 1, 2008 taxpayers can deduct 58.5 cents per business mile, up from 50.5 cents per mile.
Taxpayers are also allowed to deduct mileage expenses related to moving, medical expenses, and charitable work. Apparently cars cost less to drive if you are driving for charity, medical care or moving. Medical and moving miles can be deducted at 27 cents per mile, charitable miles are only worth a 14 cents per mile deduction.
You can find out more at the IRS Website.
May 23rd, 2008 -- Posted in Taxes |
The IRS Stimulus payments are going out. Most single people are getting $600, married couples are getting $1,200 and there is an extra $300 per child under the age of 17. So a married couple with 2 children can expect a stimulus payment of $1,800. If you were expecting your stimulus payment by direct deposit you should have it by now. Paper check payments are being mailed weekly according to the last two digits of the primary filers social security number. You can look at this schedule of stimulus payments to see when you should expect your check. But not everyone is getting what they expected, and some people are surprised to find that they are getting nothing! Here are some of the reasons why your tax stimulus payment may be delayed or missing.
You may not have gotten the full amount of your payment because:
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February 10th, 2008 -- Posted in Uncategorized |
Henry Paulson, the Unites States Treasury Secretary announced on Friday that Congress has approved the $167 billion, debt financed, Economic stimulus package, and that the IRS will be working through the tax season in order to send out the “rebate” checks starting in May of 2008.
I hate to break the news to everyone, putting the country even further in debt isn’t going to provide any long term stimulus to the economy, the IRS has enough trouble keeping up with tax season without adding the task of sending out millions of rebate checks, and technically these are not rebate checks, they are prepayment checks, there is a difference.
While everyone in Congress and the media are talking about Rebate checks, when you visit the Internal Revenue Service they are referring to “advance payment checks”. Is there a difference? Yes! Quite a bit. A rebate is generally understood to be a “giving back” of funds that were already paid. If these were true rebate checks, they would be a refund of taxes previously paid. But in fact, the checks will be prepayments of tax refunds. Details are sketchy right now, but I would expect that with the prepayment checks going out in May, there will be fewer and smaller tax refunds in early 2009.
It is also unlikely that he so-called rebate checks will help the economy. The idea behind the checks is that the people would run with the money to their nearest store and spend it on some type of “stuff”. This would give retailers a boost and keep the economy from falling into recession. Yet, when prepayment checks were issued in 2001, over half the recipients used the money for savings or paying down debt. It sounds like this time won’t be any different. According to the surveys I have seen, most people plan to use their rebate check to pay down debt.
For me, I’ll be sending my check right back to the IRS. It will help towards paying my quarterly estimated tax payments. What will you be doing with your prepayment check?
