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IRS Increases Mileage Rates

As of June 23rd, 2008, the IRS has increased the optional standard mileage reimbursement rate by 8 cents which is in effect for the last 6 months of tax year 2008 (July 1—December 31). For any business miles driven from January 1st through June 30th, the rate stands as 50.5 cents per mile, 19 cents per mile driven for medical or moving purposes and 14 cents per mile driven in service of charitable organizations. The new rate applies to qualifying expenses that have incurred on or after July 1st. As of July 1, 2008, through Dec. 31, 2008 the rate is now increased to 58.5 cents a mile. Therefore, it is important that the qualifying miles incurred between January 1, 2008 and June 30, 2008 are recorded separately from the miles accrued on and after July 1. When filing at RapidTax.com, we’ll automatically apply the appropriate calculation on your business miles.

“Rising gas prices are having a major impact on individual Americans. Given the increase in prices, the IRS is adjusting the standard mileage rates to better reflect the real cost of operating an automobile.”

– IRS Commissioner Doug Shulman.

Generally, the IRS adjusts the standard mileage rates annually based on a yearly study of the fixed and deductible costs of operating an automobile for business, charitable, medical or moving purposes; however, due to the increase on gas prices, the rate has been updated to accommodate the rising cost. Since this increase also applies to medical and moving miles, they have also been changed from 19 cents per mile to 27 cents per mile.

The IRS has already acknowledged the recent drop in gas prices towards the end of 2008. In result, the optional standard mileage rate for 2009 has decreased to 55 cents per mile, a slight adjustment from the 58.5 cents per mile mentioned above. Miles for medical or moving purposes will be calculated at a new rate of 24 cents per mile and 14 cents per mile for service of charitable organizations. These new rates will not effect the upcoming tax year, but rather your 2009 taxes to be completed in 2010.

For more information, refer to IRS Announcement 2008-63.

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2008 Economic Stimulus Payment

What is the Stimulus Rebate?

The 2008 Tax Rebate is an economic stimulus payment that more than 130 million households will receive starting May 2nd, 2008. The rebate will not be taxable nor will it affect your tax liability or refund. To qualify for the stimulus rebate, simply file your 2007 Individual Income Tax return and nothing more. In order to receive a stimulus payment, a return must be filed by April 15, 2008 or October 15, 2008 (with extension) . This payment is automatic and eligibility is determined based on the information provided on your 2007 tax return.

Who is eligible to receive this rebate?

Taxpayers are required to meet the following conditions to be qualify for the stimulus rebate: • must have a valid Social Security Number • cannot be claimed as a dependent on a tax return • have qualifying income of at least $3,000. If you are filing a ‘Married Filing Joint’ return, BOTH people listed on the return must have a valid Social Security Number in order to qualify for the payment. Eligibility for the stimulus payment is subject to maximum income limits. The payment, including the basic amount and the amount for qualifying children, will be reduced by 5 percent of the amount of income in excess of $75,000 for individuals and $150,000 for those with a Married Filing Jointly filing status.

What is Qualifying Income?

For the purpose of the Stimulus Payment, qualifying income consists of earned income such as wages and net self-employment income, Social Security, certain Railroad Retirement benefits, veterans’ disability compensation, and pension or survivors’ benefits received from the Department of Veterans Affairs. Supplemental Security Income is not qualifying income for the stimulus payment.

How much money will I receive?

The IRS will determine your payment based on the information provided on your 2007 tax return.

Click here to calculate your 2008 rebate.

If you are an eligible individual you may receive anywhere from $300 and $600. Taxpayers who have filed a joint return, may receive anywhere between $600 and $1,200. An additional $300 payment will be made for each qualifying child listed on your return that is younger than 17 and is eligible for the Child Tax Credit with a valid social security number.

When will I receive the Stimulus Payment?

Stimulus Payments will be sent out in the order of the last two digits of the primary Social Security Number used on the tax return. Whether you chose direct deposit or a paper check will also determine how soon you will receive your payment. Payments will be directly deposited into your account beginning May 2. Paper checks will be mailed starting May 16.

Taxpayers who file a return after April 15 will receive their Stimulus Payment about two weeks later than the normal schedule.

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2008 IRS Calendar & Deadlines

March 3, 2008

Farmers and fishermen must file their 2007 return by this date and pay any tax due to avoid penalty. If 4th quarter estimated taxpayment was made by January 15th, 2008, this deadline extends to April 15, 2008.

March 17, 2008

Deadline to file corporate tax return (1120,1120A, and 1120S).

Last day to request automatic 6-month extension.

Deadline to file amendment for corporate returns for tax year 2004 and claim a refund. 2004 Corporate returns filed after this date will not be eligible for a refund.

March 31, 2008

Last day for employers to file electronically file their W-2 and 1099 Statements with the Social Security Administration.

April 15, 2008

2008 Individual Tax Return Deadline

Last day to file on-time (Form 1040, 1040A, 1040EZ) and pay any tax due.

Last day to request extension through Form 4868.

Last day to to file and claim a refund for tax year 2004.

Last day to file a 2004 Amended Return (1040X) and claim a refund.

1st Quarter estimated tax payment due for tax year 2008.

Deadline to file estate, trust or partnership tax returns. Also, last day to file amendment for 2004 estate, trust or partnership tax returns and claim a refund. Amendments for tax year 2004 filed after this date will no longer be eligble for a tax refund.

April 22, 2008

Last day to file with the Rapid Access Loan (RAL) as refund method for 2007 tax returns.

May 15, 2008

Last day to file non-profit organization information returns or to request an extension.

June 16, 2008

2nd quarter estimated tax payment due for 2008 tax year.

Deadine for United States Citizens living abroad to file individual tax returns or request a 4-month extension.

September 15, 2008

3rd quarter estimated tax payments due for 2008 tax year.

October 15, 2008

Last day to file individual tax return (1040, 1040A, 1040EZ) with extension.

Deadline for 2007 tax year E-File. All returns must be signed and mailed after this date.

Final deadline to file trust and partnership tax returns with extension.

Last day for the Fee From Refund as a refund method for 2007 tax return through SBBT.

December 31, 2008

Filing Status/Living Conditions determined on this date for the entire year for the purposes of 2008 individual tax return.