Tax Bulletin 2008

Maurice M. Glazer, CEO

If you have a U.S. or Foreign tax question or need individual tax assistance, Glazer Financial Network has a full staff of CPA's, enrolled Agents and Accountants to assist.

DO NOT ATTEMPT TO HANDLE BY YOURSELF
We also have a number of tax Attorneys we work with to assist if necessary.

You may email Morey at mglazer@glazerfinancial.com or call 830-899-4603.

Closely Held Corporation

The following points need to be addressed based on audit points presented by the Internal Revenue Service:

1. Minute books need to be current and complete;
2. Personal automobiles used for business need to be approved and in the minutes;
3. Loans from the Corporation need to be documented with terms and conditions, i.e. interest and payment terms when you close the Corporation or cease employment, the balance is taxable;
4. Personal expenses paid by the Corporation need to be picked up as constructive dividends even if charged to loan accounts; and
5. Start up expenses can be amortized by filing Form 4562. The first $50,000 amortized over ten (10) years and the remaining balance over fifteen (15) years.

PLEASE CALL IF YOU HAVE AN IRS NOTICE AND DO NOT IGNORE

Personal Tax Return Items

Donations:

1. You must have substantiation of all deductions over $250.00.

1. Letter from Charity; and

2. Cancelled check;

2. Under $250.00 cancelled checks or a receipt; and
3. For Donations of household goods over $500.00, you must attach an appraisal with your tax return.

Travel

1) For travel you can use per diem rates for foreign travels if you do not have actual receipts. Code Sec. 274 — Released August 1, 2008; and

2) With airlines reinstating the Saturday night stay over rule for cheap fares… Remember that an extra day tacked onto a business trip can be deductible if the total cost of the trip is lower as a result. The extra meal and lodging expenses for the nonbusiness day must be less than the cost of flying without a Saturday stay. This is so even if the additional day is used for sightseeing, shopping and the like. Reimbursement of the extra day's food and lodging is also tax free to employees;

3) Auto deductions should be documented with mileage logs. If you regularly get oil changes or repair services, mileage is always noted.

Property Taxes

For 2008, non-itemizers can deduct property taxes in addition to standard deductions - $1,000.00 married and $500.00 single

Home Real Estate

On sales of primary homes, surviving spouses can claim the $500,000 gain exclusion up to two (2) years after spouse's death.

To be a real estate professional and deduct all losses from rental real estate you must work at least 750 hours per year and spend one-half of your working hours in real estate.

First time homebuyers get a tax credit for up to $7,500.00 if buying a main home after April 8, 2008 and before July 1, 2009.

To be eligible you must have not owned principal residence in U.S. for the previous three (3) years. Credit phases out — Married $150,000 to $170,000, Single $75,000 to $95,000 can elect credit for 2008 or 2009. This credit will be recaptured over fifteen (15) years.

One time transfer to a HSA (Health Savings Account) can pay off tax wise for folks who have made after tax contributions to the IRA. See Notice 2008-51.

The Internal Revenue Service is setting up a self-audit program which would allow taxpayers to fix a mistake in regards to such items as entertainments and travel, and auto.

Capital Gains

Capital Gains excluded up to $500,000 if married, $250,000 if single have to live in as primary home for two (2) years.

Filers who are in 10% or 15% tax brackets will have 0% capital gains in 2008

PLANNING IS IMPORTANT, PLEASE CALL. DO YOU KNOW YOUR 2008 TAX SITUATION?

Partnerships, Estates and Trusts

Partnerships, Estates and Trusts will only have an extension to September 15^th in order to give individuals time to get their K-1's and file their personal returns.

Kiddie Tax

Kiddie Tax — Age rises in 2008 to 19 and full time students whose earned income is less than half their support, age increases to 24.

If Kiddie Tax applies, a child's unearned income over $1,800 including capital gains is taxed at parents marginal rate.

Adoption Credit

Adoption Credit is now $11,650.

Savings Plans

Age Phase Outs				Born In
$85,000 - $105,000	IRA's & Roths	$ 5,000	$ 6,000	1958
	401(k) & 403(B)	$15,500	$20,500	1959
	Simple IRA's	$10,500	$14,000	1958
	Defined Contribution Plans	$46,000
Benefit Limit	Defined Benefit Plans	$185,000

Foreign

If you have foreign financial or bank accounts over $10,000, you have to file Form TDF90-22.1 every year.

If you own more than 10% of the shares of a Foreign Corporation that operates your business or owns real property, you need to file Form 5471.

Owning Property in a Foreign Trust requires you to file Form 3520 when the trust is established and 3520A each year thereafter.

Please contact MAURICE M. GLAZER, CEO, at GLAZER FINANCIAL NETWORK if you need any additional information.

Glazer Financial Network

800-999-8931

830-392-0643

Please call or contact us here for additional Information
Best Regards,

Maurice M. Glazer, CEO

Glazer Financial Network

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Contact us for a complimentary consultation.
(972) 385-0007 or (800) 999-8931

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