The standard mileage rates for the use of automobiles beginning January 1, 2009 will be 55 cents per mile for business miles driven and 24 cents per mile driven for medical or moving purposes, the Internal Revenue Service announced yesterday in IR-2008-131. The new...
IRS Issues Fact Sheet on S Corporation Officer Compensation
The Internal Revenue Service (IRS) recently issued Fact Sheet FS-2008-25, which discusses S corporation officer compensation. Corporate officers, whether in S corporations or C corporations, are generally considered employees of the corporation. Officers who perform...
Question of the Week: Is There Anything I Can Do About a Late Payment Notice I Received?
This week’s question comes from Larry, a business owner. I own a business in Indiana. I was late making a federal tax deposit due to the storms. Is there anything I can do? Answer: On September 12, 2008, the federal government declared Clark, Crawford, Dearborn,...
IRS Allows Taxpayers in Louisiana and Texas Affected by Hurricane Ike Additional Time to File and Pay Tax
The Internal Revenue Service announced recently that certain taxpayers in Louisiana and Texas will have until January 5, 2009 to file most returns and pay most taxes. Additionally, failure to deposit penalties for employment and excise deposits due on or after...
IRS Says No Dollar Limit on de Minimis Fringe Benefits
Responding to a request from Senator Richard Shelby (R-Ala.), the IRS stated that there is no dollar limit imposed by law on de minimis fringe benefits. A constituent had written to Shelby and stated that the constituent’s employer required all non-cash gifts valued...
IRS Issues Guidance on Payments to Deceased Employees
The IRS recently issued guidance for reporting wages paid in 2008 (including accrued wages and vacation pay) on behalf of deceased employees. Although state law generally controls who receives the unpaid wages, the reporting follows the same rules even if the check is...
IRS Provides Safe Harbor for Payroll Tax Deduction
In Rev. Proc. 2008-25, the IRS provided a safe harbor method of accounting for accrual-basis taxpayers to use to account for FICA and FUTA taxes. It also established procedures for taxpayers to use to change their method of accounting to this safe harbor method. Under...
Reduced Taxes Due on Reclassified Employees
In Private Letter Ruling 200825043, the IRS concluded that employers who receive a determination letter from the IRS that someone previously classified as an independent contractor should be classified as a employee may use §3509 to reduce the amount of employee FICA...
IRS Clarifies Withholding on Supplemental Wages
In Revenue Ruling 2008-29, the IRS clarified the amount of federal income tax to be withheld on certain supplemental wages. Situations covered include sales commissions, draws, signing bonuses, severance pay, annual leave, vacation and sick pay, and sick pay paid at a...
IRS Issues Guidance on Health Savings Accounts
The IRS recently issued Notice 2008-59 on Health Savings Accounts (HSA), which are available to taxpayers enrolled in a High Deductible Health Plan. Qualified contributions to an HSA are not subject to federal income tax and distributions from an HSA for qualified...
IRS Increases Mileage Rate to 58.5 Cents per Mile
The standard mileage rates for the use of automobiles beginning July 1, 2008 will be 58.5 cents per mile for business miles driven and 27 cents per mile driven for medical or moving purposes, the Internal Revenue Service announced June 23 (IR-2008-82; Announcement...
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