Tax Refunds To Be Delayed
If you are expecting a refund when you file your tax return, it looks like you are going to have to wait until mid February before you see the check. The holdup is that Congress failed to act in correcting the Alternative Minimum Tax problem until late this month (December). President Bush signed the legislation on December 26, 2007.
Now the IRS has to go back and reprogram all of their computers before they can process returns. By the way, now all the tax forms are wrong. In order to send the tax packages out after the first of the year, the IRS has to send the drafts to the printers by the middle of November.
What a mess.
The IRS Will Be Cashing Your Check Sooner
In the past when I wrote a check to the IRS I usually had 10 to 15 days before the check cleared the bank. No more. The Service is reducing the "float" on checks mailed with income tax returns. It will convert checks into direct debits so it gets the money right away. Be sure the funds are in your account.
More Medical Expenses Allowable In Your Flex Plan
Good news for those of you that have a flex or cafeteria plan. The cost of many diagnostic medical procedures is deductible as a medical expense, even though the patient has no symptoms of illness, the IRS says. This includes the cost of pregnancy test kits and electronic body scans as well as annual physicals (Rev. Rul. 2007-72).
As a result, the costs can be covered by flexible spending plans and health reimbursement arrangements.
Cafeteria Plan Relief May Be On the Way
Firms with cafeteria plans are requesting the IRS be more understanding. Recent IRS regulations adopt a strict all-or-nothing rule on mistakes made in cafeteria plans. Any error, no matter how small, disqualifies the plan and causes employees to owe tax on all benefits elected under the plan.
It appears that this ruling is unreasonable. Look for the IRS to agree with them sometime in 2008 but until it does, watch your plan carefully.
S Corporations Can Have Health Insurance In Owner's Name
In the past we have been struggling with the IRS’s position on health insurance for owners of small S corporations. The IRS’s position was that the health insurance policy had to be in the corporation's name or the premiums did not get a tax advantaged treatment. The problem was that in some states corporations can't buy a group plan with one participant.
Good news. The IRS has solved the health insurance problem for one-person S firms by clarifying that the premiums they pay are deductible for policies bought in the owner's name.
List Of Vehicles Qualifying for a Tax Credit
Wondering if your alternative fuel vehicle qualifies for a credit? Check the IRS' latest list, which has makes and models of vehicles eligible for a credit of up to $12,000 a year if they are powered by fuels such as liquefied natural gas, hydrogen or 85% methanol. In addition, hybrid trucks, buses and other vehicles with gross vehicle weight ratings over 8,500 pounds qualify for a separate tax credit of up to $32,000.
Go to www.irs.gov/businesses/article/0,,id=175456,00.html to see the list.
If you are expecting a refund when you file your tax return, it looks like you are going to have to wait until mid February before you see the check. The holdup is that Congress failed to act in correcting the Alternative Minimum Tax problem until late this month (December). President Bush signed the legislation on December 26, 2007.
Now the IRS has to go back and reprogram all of their computers before they can process returns. By the way, now all the tax forms are wrong. In order to send the tax packages out after the first of the year, the IRS has to send the drafts to the printers by the middle of November.
What a mess.
The IRS Will Be Cashing Your Check Sooner
In the past when I wrote a check to the IRS I usually had 10 to 15 days before the check cleared the bank. No more. The Service is reducing the "float" on checks mailed with income tax returns. It will convert checks into direct debits so it gets the money right away. Be sure the funds are in your account.
More Medical Expenses Allowable In Your Flex Plan
Good news for those of you that have a flex or cafeteria plan. The cost of many diagnostic medical procedures is deductible as a medical expense, even though the patient has no symptoms of illness, the IRS says. This includes the cost of pregnancy test kits and electronic body scans as well as annual physicals (Rev. Rul. 2007-72).
As a result, the costs can be covered by flexible spending plans and health reimbursement arrangements.
Cafeteria Plan Relief May Be On the Way
Firms with cafeteria plans are requesting the IRS be more understanding. Recent IRS regulations adopt a strict all-or-nothing rule on mistakes made in cafeteria plans. Any error, no matter how small, disqualifies the plan and causes employees to owe tax on all benefits elected under the plan.
It appears that this ruling is unreasonable. Look for the IRS to agree with them sometime in 2008 but until it does, watch your plan carefully.
S Corporations Can Have Health Insurance In Owner's Name
In the past we have been struggling with the IRS’s position on health insurance for owners of small S corporations. The IRS’s position was that the health insurance policy had to be in the corporation's name or the premiums did not get a tax advantaged treatment. The problem was that in some states corporations can't buy a group plan with one participant.
Good news. The IRS has solved the health insurance problem for one-person S firms by clarifying that the premiums they pay are deductible for policies bought in the owner's name.
List Of Vehicles Qualifying for a Tax Credit
Wondering if your alternative fuel vehicle qualifies for a credit? Check the IRS' latest list, which has makes and models of vehicles eligible for a credit of up to $12,000 a year if they are powered by fuels such as liquefied natural gas, hydrogen or 85% methanol. In addition, hybrid trucks, buses and other vehicles with gross vehicle weight ratings over 8,500 pounds qualify for a separate tax credit of up to $32,000.
Go to www.irs.gov/businesses/article/0,,id=175456,00.html to see the list.
This is an interesting bit of IRS trivia:
The IRS received $48.7 billion in tax receipts from individuals on April 24, 2007, a one-day IRS record.
