News & Events

Tax Increase Prevention Act of 2007 (H.R. 3996) Signed Into Law

On December 26, President Bush signed into law the Tax Increase Prevention Act of 2007 (H.R. 3996). This provides a one-year patch for the alternative minimum tax (AMT). The legislation was passed by the Senate on December 12, 2007 and by the House on December 19, 2007.

The provisions of the Act are summarized below:

Effective for taxable years beginning after December 31, 2006.

Extension of Increased Alternative Minimum Tax Exemption Amount [Act §2; Code §55(d)(1)] -- The Act amends §55(d)(1) by increasing the alternative minimum tax exemption amount to (1) $66,250 for a married individual filing a joint return, or a surviving spouse; and (2) $44,350 for an unmarried individual who is not a surviving spouse.

Extension of Alternative Minimum Tax Relief for Nonrefundable Personal Credits [Act §3; Code §26(a)(2)] -- The Act amends §26(a)(2) by extending to taxable years beginning in 2007 the limitation on the nonrefundable personal credits that may be used to offset a taxpayer's alternative minimum tax liability.

IRS Announces 2008 Standard Mileage Rates

The Internal Revenue Service has issued the 2008 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes.
Beginning Jan. 1, 2008, the standard mileage rates for the use of a car (including vans, pickups or panel trucks) will be:

• 50.5 cents per mile for business miles driven;
• 19 cents per mile driven for medical or moving purposes; and
• 14 cents per mile driven in service of charitable organizations

The new rate for business miles compares to a rate of 48.5 cents per mile for 2007.

The standard mileage rates for business, medical and moving purposes are based on an annual study of the fixed and variable costs of operating an automobile. Runzheimer International, an independent contractor, conducted the study for the IRS.
The mileage rate for charitable miles is set by statute.

Social Security Compliance Issues Still Plague Many Companies

Many companies are still having problems with Social Security compliance issues. The IRS and Social Security Administration (SSA) process about 240 million W-2s each year and about 10% of them have names and Social Security numbers that don't match. As a result, employees' earnings are not able to be credited to their Social Security accounts. The easiest way to correct this problem is to have a policy in place to verify the Social Security number for all employees. Once the policy is in place, the company needs to take steps to make certain that the information is correct.

The following five steps can help ensure Social Security Number compliance:
1. Ask each new worker for proof of his/her Social Security Number (SSN) by showing you his/her Social Security card. Maintain a copy of the W-4 the employee provides and document any subsequent requests for a new W-4 form you make.
2. Maintain accurate records of the SSN and the name provided by the employee in all payroll records.
3. Remind workers to report any name changes due to marriage or divorce to SSA first and then the employer.
4. Validate the SSN on the W-4 with a SSN validation service.
5. Remind employees to verify the accuracy of their name and SSN when they receive their W-2 and report any inaccuracies to the payroll department.