For your information, please find a review of some helpful points from the March edition of General Ledger, a newsletter for professional bookkeepers.

According to AIPB newsletter, "the fiscal stimulus bill includes breaks for business in 2008. The package enacted in early February doubles the Section 179 expensing limit for 2008, allowing write-offs of up to $250,000 for equipment purchases. The eligibility limit also is doubled, so businesses are eligible until they purchase more than $800,000 of equipment (instead of the current $410,000).

In addition, after taking Section 179 deduction, all businesses can take in 2008 a 50% first-year bonus depreciation on computer software not covered by section 197, qualified leasehold improvement property as well as any property covered by MACRS with a recovery period of 20 years or less (the same types of property you could take bonus depreciation on under the law that expired in 2004).

First year depreciation limit on passenger autos is increased by $8,000, i.e. the normal 2008 first-year limit plus $8,000."

In other tax news, according to AIPB, as a result of big revenue increases from 2007, audits for those with incomes of $1 million rose 84%; $200,000 or more, 29.2%, and S Corp audits rose 26%, while partnerships increased almost 25%.

February 28th is the due date for most information returns, the most common of which is Form 1099-MISC. Commonly, any payments over $600 in total for services performed for a trade or business by people not treated as its employees must be reported on Form 1099-MISC.

Please visit IRS website for complete guide to information returns http://www.irs.gov/efile/article/0,,id=98114,00.html

For your information, please find a review of some helpful points from the latest General Ledger, a newsletter for professional bookkeepers:

According to AIPB's monthly newsletter, "the IRS has figured out another way to catch employers to misclassify employees as Independent Contractors to save on payroll taxes. Now workers can file a complaint by filling out a Form 8919, Uncollected Social Security and Medicare Tax on Wages. To know whether a worker is an Independent Contractor, the IRS examines 3 areas: 1 Behavioral control or the right to direct or control performance of tasks; 2 financial control or the right to direct or control financial aspects of the worker's activities. The business has less financial control if the worker makes a significant investment, incurs unreimbursable expenses or makes services available to other employers. 3 The relationship of the parties as it is shown in agreements and actions toward each other."

For more information you can also visit the IRS website at irs.gov or follow this link to an article about Independent Contractors vs. Employees:
http://www.irs.gov/businesses/small/article/0,,id=99921,00.html

Some useful rates an IRS limits from the AIPB newsletter for 2008:

Mileage
Business* 50.5 c/mile
Relocation 19.0 c/mile
Medical 19.0c/mile
Charitable rate 14.0c/mile

Qualified retirement plan limits

Pretax contributions for 401(k) and SEP plans and 403(b) annuities $15,500
Workers aged 50 or over (catch-up) $5,000
Sec.415(b)(1)(A) defined benefit plan annual benefit ceiling $185,000
Combined employer/employee pay-in limits for all defined contribution plans $185,000
Annual compensation limit under Sec. 401(a) (17) and Sec. 404(1) $230,000
Sec. 408(k)(3)(C) IRA, SEP or SIMPLE plan limits $230,000
SIMPLE pretax contribution limit $10,5000
Workers aged 50 or over (catch-up) $2,500
You may also find A Guide to Common Qualified Plan Requirements at the IRS website by following this link:
http://www.irs.gov/retirement/article/0,,id=112858,00.html

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