The IRS has increased the business mileage rate from $0.505 per mile to $.585 per mile as of July 1, 2008. Employers are not required to pay this amount so employees shouldn’t expect their mileage rates to go up automatically. If the employer does not pay the full $.585 per mile, employees who itemize on their taxes may be able to take the difference as a business expense on Form 2106.
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Medical and moving expense mileage has also increased as of July 1, 2008 to $0.27 a mile. Miles driven for charitable purposes remain at $0.14 per mile.
Important Note for those with Private Servers:
Please note that our ISP automatically blocks emails coming from private servers to protect against spam. If you receive a bounce back message when sending us an email please contact us and provide us with your IP address so we can get our ISP to ‘white-list’ it. Once your IP address is ‘white-listed’ your emails will be allowed to go through to our server. Conversely, be sure to add us to your address book because we also have a private server.
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Please note that our ISP automatically blocks emails coming from private servers to protect against spam. If you receive a bounce back message when sending us an email please contact us and provide us with your IP address so we can get our ISP to ‘white-list’ it. Once your IP address is ‘white-listed’ your emails will be allowed to go through to our server.
There are new batches of SPAM emails with various content coming from what looks like the IRS, beginning October 30, 2007. The IRS does NOT work this way. DELETE these emails. Do NOT Open them. Spam-block future ones if you can. The IRS NEVER specifically emails taxpayers (individuals or businesses), and is never allowed to request information by email from taxpayers, even during an audit or other procedure requiring communications. The IRS DOES send general informational bulletins by email, but only if you have signed up for the service (which is not easy and could not possibly be done accidentally).
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The filing deadline for S-Corporation tax returns is March 15 or the next business day if this date falls on a weekend or holiday.
We can file an extension for you, which will give you until September 15, or the next business day if this date falls on a weekend or holiday, to file your return.
Please be aware that in order for Bayley Davis Associates to prepare your return we need your information in our offices as soon as possible; preferably by August 1, 2008 but absolutely no later than August 15, 2008 to ensure that we have the time to prepare your return.
In order to ensure you pay the lowest tax allowable, this means that your personal tax info will also need to be to us by August even though your 1040 is not due until October 15, or the next business day if this date falls on a weekend or holiday
Unlike in past years, there will be a penalty for S-Corporations filing late EVEN THOUGH NO TAXES ARE DUE WITH THE 1120S RETURN. The penalty is $85 per month or part of a month per shareholder up to 12 months. If taxes ARE due, the IRS will charge an additional penalty of 5% of the unpaid tax for each month or part of a month the return is late up to a maximum of 25% of the unpaid tax.
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The filing deadline for Corporation tax returns is March 15, or the next business day if this date falls on a weekend or holiday. We can file an extension for you, which will give you until September 15, or the next business day if this date falls on a weekend or holiday, to file your return.
Please be aware that in order for Bayley Davis Associates to prepare your return we need your information in our offices as soon as possible; preferably by August 1, but absolutely no later than August 15 to ensure that we have the time to prepare your return.
Interest and penalties are charged on taxes paid after the filing deadline even if an extension of time to file is granted. A late payment penalty of 1% of the unpaid tax per month or part of a month will be charged up to 25% of the unpaid tax. Interest is charged on taxes and penalties at the IRS determined rate. To avoid this; if you think you will owe taxes call our office to receive a payment estimate to include with your extension.
Effective April 1, 2008: Sales and use tax within all of King County, Clark and Okanogan Counties will increase one-tenth of one percent (.001). The funds will be used for chemical dependency or mental health treatment services. The new rates will be 9.0%. Please note that this does not apply to lodging charges subject to the convention and trade center tax; that is, lodging charges of hotels/motels with 60 or more lodging unit.
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In 2002 Washington State voters approved Initiative 776 (remember the initiative that lowered car tabs to “$30.00”), which eliminated the Vehicle License Fee that provided $5 million per year to the City for transportation purposes.
Effective July 1, 2007 the Employee Hours tax goes into effect in the City of Seattle. Also known as the Business Transportation Tax, Ordinance #122191 was passed on August 7, 2006. This ordinance imposes a tax on businesses whose employees work in the City of Seattle, regardless of the location of the business. In other words, if you have employees that work within the city you are responsible to pay a tax on the number of hours worked in the city regardless of the location of your business. The tax must be reported and paid on an annual basis, at the same time that your fourth quarter or annual tax return is due (this year January 31, 2008).
For the 2007 tax year the amount of the tax will be equal to the number of employee hours worked in the City of Seattle during the period beginning July 1, 2007 and ending December 31, 2007 multiplied by $0.01302. All future years will be calculated based on the full calendar year. The calculation should exclude vacation and sick leave hours. If you have an employee who works both inside and outside the City of Seattle you will be responsible to calculate the number of hours worked within the city.
There are a few deductions and exemptions available and a $50.00 credit for all business reporting and paying the employee hours tax. A couple of the major exemptions are for businesses with gross annual worldwide income of less than $50,000, and for all businesses that the City of Seattle is preempted from taxing pursuant to federal or state statutes or regulations. For a complete list of the exemptions and deductions, please refer to SMC 5.37.050, or you may access ordinance 122191 at http://clerk.ci.seattle.wa.us/ and selecting “search city council bills and ordinances” and enter ordinance number 122191.
Note: for those of you who work strictly out of your home we are interpreting “non-motorized commutes” to include you.
When you receive your tax forms from the City of Seattle please forward them to us with your information. We will need the forms in order to correctly file your return. If you already received it (and threw it away like we said you could) you will need another copy as we are unable to file it online at this time. To obtain another copy you will need to call the City of Seattle at (206) 684-8484 and request a duplicate copy of your “City of Seattle Employee Hour Tax Form”.
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This notice applies to anyone in Washington State who pays B&O taxes in the city in which they do business. The change in computation begins January 1, 2008 so you need to start tracking the new information now.
In 2003 the (State) Legislature passed EHB 2030 (RCW 35.102), the city B&O legislation. The law requires the 39 cities with local B&O taxes to adopt allocation and apportionment provisions as part of an updated city B&O tax model ordinance by January 1, 2008. (RCW 35.102.130)
The information you are required to track and the way the taxes are computed has changed. The information we need in order to file your quarterly or annual B&O taxes has changed.
If you have any questions regarding these changes please contact us at associates@bayleydavis.com or (206) 937-7410.
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