5 Ways to avoid an IRS Audit
Rule 1: Check your arithmetic
Rule 2: Arrange your finances so they don't stand out
Rule 3: Substantiate, substantiate, substantiate
Rule 4: Know when to file
Rule 5: Plan your taxes to pre-empt an audit
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Important Tax Dates
March 2
Farmers and fishermen. If you did not make estimated tax payments for 2008, you can avoid penalties by filing your tax return and paying any tax due.
March 16
Corporations. File a 2008 calendar-year income tax return (Form 1120 or 1120-A) and pay any tax due. You can apply for an automatic six-month extension with Form 7004. If you file for an extension, you must also make an estimated tax payment.
April 15
Tax return due. Your 2008 income tax return is due, unless you file for an extension until Oct. 15.
File for extension. If you want an automatic extension of time to file your 2008 tax return, file Form 4868. Filing the form gives you until Oct. 15 to file your return. To avoid a penalty, however, be sure to pay any tax that was due on April 15.
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2008 Tax Update
2008 TAX UPDATE
Tax season is around the corner, and as usual there are quite a few changes in the tax laws. This year’s changes generally seem to benefit the taxpayer, although some do not, such as the changes applying to unearned income of children. Here’s a summary of major Changes in 2008.
federal individual taxes.
IRA Deductions The maximum IRA deduction has been increased: to $5,000 for taxpayers under 50 at the end of 2008; and to $6,000 for taxpayers
older than 50 but under 70½ at year end.
Section 179 The section 179 deduction has been increased from $125,000 to $250,000. This amount is reduced dollar for dollar by the amount that
total expenditures exceed $800,000 (up from $500,000).
Personal Exemptions The exemption amount has gone up to $3500, and the phase-out amount for persons with adjusted gross income above certain
limits has been reduced. The maximum that can now be phased out is $1167 or 1/3 of the exemption amount. Taxpayers can deduct at least $2,333 per exemption, regardless of AGI.
Itemized Deductions The phase-out of itemized deductions for persons with AGI above $159,950 ($79,975 if married filing separately) has also been reduced by ½ the amount that would have been phased out under 2007 rules.
Automobile Standard Mileage Rate The standard mileage rate changed in mid-year for 2008. The amount is 50.5 cents per mile before July 1, 2008 and 58.5 cents per mile after June 30. The
amount allowed for medical deductions at the start of the year was 19 cents per mile, increased after June 30 to 27 cents per mile.
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