Tax news November 2008

Tax

New law encourages cash donations for Midwest disaster relief

Taxpayers who make qualifying cash contributions for disaster relief efforts in the Midwest could benefit from a recently passed law that suspends the percentage-of-income limits that would normally apply when taxpayers deduct the contributions on their 2008 federal tax returns.Under the Heartland Disaster Tax Relief Act, an individual taxpayer who itemizes deductions may choose to deduct qualifying cash contributions up to 100 percent of his or her adjusted gross income, reduced by deductions for other charitable contributions.
Tax

Don't rush on mandatory withdrawals from retirement accounts

Some relief might be on the way for senior citizens required to take minimum withdrawals from their individual retirement accounts at a time when the stock market has blown a hole in their financial portfolios.The Wall Street Journal is reporting that government officials are considering possible changes to the rules that require millions of Americans to start minimum withdrawals at age 70 1/2. Possible options include delaying the withdrawals or reducing the amount of the withdrawals.
Tax

Payment options for late filers

By Hal S. Margolit, CPA/MST  October 15th was the final filing deadline for 2007 extended Federal personal income tax returns. Perhaps you know of clients that should have filed and missed the deadline. Maybe their reasons for nonfiling were that there is a large amount due and they cannot afford to pay it now. Or perhaps, they are still waiting for information with which to prepare their return.
Tax

IRS announces 2009 standard mileage rates

The Internal Revenue Service has issued the 2009 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical, or moving purposes.Beginning on January 1, 2009, the standard mileage rates for the use of a car (also vans, pickups, or panel trucks) will be:55 cents per mile for business miles driven24 cents per mile driven for medical or moving purposes14 cents per mile driven in service of charitable organizationsThe new rates for business, medical, and moving purposes are
Tax

Raffaello Follieri's fall from grace

Oh, how the mighty have fallen! As it turns out, Raffaello Follieri doesn't exactly qualify as "mighty," but to attain a lavish lifestyle and celebrity girlfriend -- Anne Hathaway -- he dropped some mighty big names... the biggest. His romance with Hathaway fell apart last summer shortly before she helped the FBI put together a case against Follieri that could've gotten him a prison sentence of 265 years.Here's what Follieri did, according to authorities. In 2003, he arrived in New York, claiming to have inside ties to the Vatican.
Tax

IRS revenue agent arrested on tax fraud charges

A revenue agent with the Internal Revenue Service has been arrested in connection with a scheme to defraud the government by claiming that he suffered a loss when he sold his real estate, when in fact he realized a substantial profit.Jim H. Liu, 42, of Diamond Bar, California, was arrested Sunday night at Los Angeles International Airport. Liu was indicted last week by a federal grand jury on three counts – one count of submitting a false tax return and two counts of obstructing the IRS investigation into his tax return.
Tax

Obama's tax decisions will define income tax systems for years

Tax policy decisions ahead: President-elect Obama's call for change, prepared by the Tax Policy Group of Deloitte Tax LLP in Washington, D.C., predicts that with Barack Obama in the White House and a strengthened Democratic Congress facing huge budget and tax issues, the outlook is for changes in tax policy in the next two years that could determine the size and shape of our income tax systems for the foreseeable future.
Tax

Preserve tax break for life insurance proceeds

Life insurance proceeds paid upon the death of the insured person generally are exempt from federal income tax. But income taxes aren't the end of the story. When death benefits go directly to a beneficiary other than a surviving spouse - such as a child or a sibling — the proceeds potentially are subject to federal estate tax. Strategy: Set up an irrevocable life insurance trust (ILIT). If things are handled properly, the life insurance proceeds won't be included in the client's taxable estate because the client won't be considered the owner of the policy.
Tax

Melissa Etheridge suggests California gays stop paying taxes

Since the recent passage of Proposition 8 in California, restricting the definition of marriage to a union between a man and a woman, homosexual men and woman and those sympathetic to their cause have engaged in numerous protests. Singer, songwriter Melissa Etheridge has chosen to voice her objection to the legislation by encouraging a tax revolt. In her blog, she wrote:"Okay. So Prop 8 passed. Alright, I get it. 51% of you think that I am a second class citizen.... Okay, so I am taking that to mean I do not have to pay my state taxes because I am not a full citizen.
Tax

Last year's mortgage legislation may prove useful at tax time

No matter what the circumstances, from job loss or illness to changing market conditions, many homeowners are facing foreclosure or a short sale of their home this year. As the Government takes action to stabilize the housing market, homeowners who lose their homes should understand the potential tax implications and new rules regarding these transactions.
Tax

Year-end tax planning checklist includes tips for 2008 tax savings

We may have a new President-Elect, but taxpayers have only six weeks to make certain moves that will help ensure tax savings when they file in April 2009. According to Bob Trinz, Senior Tax Analyst for the Tax & Accounting business of Thomson Reuters, "Factors that challenge year-end planning include the stock market's swoon, the economic climate, and the strong possibility of tax changes next year.
Tax

SEC files insider trading charges against Mark Cuban

The Securities and Exchange Commission has charged Dallas entrepreneur Mark Cuban with insider trading for selling 600,000 shares of the stock of an Internet search engine company on the basis of material, non-public information concerning an impending stock offering.The Commission's complaint, filed in the U.S. District Court for the Northern District of Texas, alleges that in June 2004, Mamma.com Inc.
Tax

Accounting students learn how to crack the case

Collecting clues, gathering evidence, and following the trail to find criminals has an undeniable appeal, but few college students make any connection between those skills and the skills of an accountant.The IRS has been making a methodical effort to change that misconception by holding mock fraud investigations in colleges and universities around the country.
Tax

IRS announces record-breaking 2008 e-file statistics

Individual taxpayers e-filed almost 90 million tax returns during 2008, an increase of more than 12 percent over the prior year. Of the 155 million tax returns filed, about 58 percent were filed electronically."More people with home computers and businesses embraced electronic filing this year," said IRS Commissioner Doug Shulman.
Tax

IRS seeks applications for TE/GE advisory committee

The Internal Revenue Service is seeking applications for vacancies on the Advisory Committee on Tax Exempt and Government Entities (ACT), which provides the IRS with public comments regarding critical tax administration matters.ACT members represent employee plans, exempt organizations, tax-exempt bond issuers, Indian Tribal governments, as well as federal, state, and local governments.ACT provides the IRS will regular input regarding the policies and procedures of the agency’s Tax Exempt and Government Entities Division.Nine vacancies exist for these customer segments:Employee P
Tax

CCH issues special briefing on President-Elect Obama's tax proposals

CCH, a Wolters Kluwer business and a provider of tax, accounting, and audit information, software and services, has issued a Special Tax Briefing detailing the tax policies of President-elect Barack Obama."Recent history supports the likelihood that there will be a major tax bill in 2009, but historical data suggests that no first-term tax law will pass until May, and usually not until late July," according to George Jones, JD, CCH senior tax analyst."But, when legislation is passed, it's l
Tax

State tax initiatives receive mixed results on election day

Income tax repeal measures were defeated in last week's election, as Massachusetts voters once again rejected a ballot question to eliminate the state's income tax, six years after the question lost by a slim margin. And in North Dakota, voters overwhelmingly rejected a measure that would reduce their income taxes by 50 percent and create an oil-tax trust fund.
Tax

Product analysis: IntelliTax

The tax preparation software world just got a little smaller, as CCH Small Firm Services (SFS) has purchased Intellitax. All renewing Intellitax users will be transitioned to TaxWise at no additional cost for the 2009 tax season. While IntelliTax had about 4,000 users, TaxWise and ATX have over 45,000 users. SFS stands ready to help all Intellitax users migrate by immediately providing a free copy of the 2007 version of the software, as well as the 2008 program when available.
Tax

AccountingWEB's Tax Software Reader Survey results

Over a period of nearly two months, AccountingWEB surveyed our readers, asking questions about the things they look for in tax software, which features are most important, which how long they've used their current software, and the likelihood that they will make a change. Here are the results of our survey:1 - Do you plan to use the same tax software program in the spring of 2009 that you did in 2008?
Tax

Product analysis: GoSystem Tax ES

Part of the Enterprise Suite from Thomson Reuters, GoSystem Tax ES is a browser-based tax preparation software that you can access from anywhere that you have an Internet connection. However, brower-based doesn't mean limited functionality. GoSystem includes more than 2,500 federal and state forms, and allows you to import client data from general ledger programs such as QuickBooks, balances from Engagement ES, and spreadsheets.

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