Industry Updates

New Last Minute 2007 Tax Law Changes:

Please note that President Bush signed into law on December 19, 2007 the Tax Increase Prevention Act of 2007 (H.R. 3996). Commonly referred to the “AMT Patch”. Please see page 10 in the 2007 Final Edition Tax Year 2008 Preview booklet, the AMT maximum exemptions change from $45,000 (MFJ), $33,750 (SNG & HH) and $22,500 (MFS) to the new amounts with the AMT patch to $66,250 (MFJ), $44,350 (SNG & HH) and $33,125 (MFS).

2008 Tax Changes

IRS Announces Increased Standard Mileage Rates Effective July 1, 2008

In response to increased fuel costs, on June 23, 2008 the IRS announced that it is increasing the optional standard mileage rates used for computing deductible automobile costs for business and other purposes, including moving. Announcement 2008-63. Beginning July 1, 2008, the new rates will be 58.5 cents per mile for business use, up from 50.5 cents, and 27 cents per mile for moving expenses, up from 19 cents. The IRS ordinarily adjusts the mileage rates once per year, but opted to do so in mid-year because the costs of fuel have escalated dramatically in recent months.

	The 2008 FICA limit has been set at $102,000 (the 2007 limit was $97,500 – still the same 6.20% for OASDI and 1.45% for Medicare).
	Starting July 1, 2008, business mileage rate will increase to $0.585 from $0.505. Business mileage rate increased to $0.505 from $0.485 for the first 6 months of the year.
	Starting July 1, 2008, excludable final move mileage rate will increase to $0.27 from $0.19. Excludable final move mileage rate decreased to $0.19 from $0.20 for the first 6 months of the year.
	The phase-out calculation for Federal itemized deductions and exemptions is reduced by 2/3 in 2008 and 2009. It was reduced by 1/3 in 2006 and 2007. Under current law, the phase-out will be completely eliminated in 2010. As it stands now, these calculations in 2011, like many other items in the tax code, will revert back to their status as of 2001.