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July 2008
Issue: 11
Mileage Rate Increased to 58.5 Cents
 
Due to increased gas prices, the IRS has increased the mileage rate to 58.5 cents per mile for the second half of 2008.  The mileage rate was 50.5 cents per mile for the first half of 2008.  Business owners and employees who don't get reimbursed by their employer can deduct the mileage rate for each business mile driven.  This is typically one of the largest deductions business owners can claim, and the increased rate means a larger deduction.
 
Most of you should have received your stimulus payment by now.  If you haven't, please check out the IRS Economic Stimulus Payment Information Center webpage to check the status of your payment.
 
Enjoy this months newsletter!  Hope everyone is having a great summer!
 
The Internal Revenue Service today announced an increase in the optional standard mileage rates for the final six months of 2008. Taxpayers may use the optional standard rates to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes.
 

The IRS may object to the compensation of shareholder-employees of a corporation. If the compensation is deemed too high or too low - in other words, it is not "reasonable" under the circumstances - the IRS could force you to make adjustments that increase taxes. This can be particularly troublesome for S Corporation and C Corporation Owner/Employees.
Age Has Its Privileges ... and Penalties
 
In an era filled with uncertainty, you can count on one thing: time marches on. Here are some important age-related financial and tax milestones to keep in mind for you and your loved ones:

 - Age 18 or 24 - For the 2007 tax year, the Kiddie Tax ceases to apply to a dependent child's unearned income (typically meaning investment income), starting with the year the child turns 18...
 
In This Issue
IRS Increases Mileage Rates through December 31, 2008
Know the Ins and Outs of "Reasonable Compensation" for Business Owners
Age Has Its Priveleges...and Penalties
Economic Stimulus Payments Information Center
Upcoming Tax Deadlines

Economic Stimulus Payments Information Center

Since the payments began, the IRS has been fielding a variety of questions on the payment schedule and amounts, factors affecting direct deposit of payments and the eligibility requirements. Check out our answers to the most frequently asked questions. More questions? Check out our other frequently asked questions. 

Read more...

Upcoming Tax Deadlines

  
July 15th - June payroll liabilities are due for monthly depositors 
 
July 31st - Federal and state quarterly payroll returns are due for businesses
 
Please let us know if there is anything we can do for you!!

Thomas R. Vetscher, CPA
John T. Vetscher, CPA

651-690-2250

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