Perry Gambrell-CPA-Metro Atlanta

FAQ's

Q: What are the new standard mileage rates for 2008?

A: The IRS recently released the 2008 optional standard mileage rates:

Business Mileage Rate = 50.5 cents per mile (up from 48.5 cents in 2007)

Medical and Moving Mileage Rate = 19 cents per mile (down from 20 cents in 2007)

Charitable Mileage Rate = 14 cents per mile (same as in 2007)

Q: How long do I need to keep tax records?

A: The IRS has a three year statute of limitations. Below are recommendations for various types of documents:

Income Tax Returns & Supporting Documents – Keep at least four years and preferably six.

Real Estate Property Records – All purchase, sale, and refinancing escrow/closing statements, and receipts and cancelled checks for improvements should be kept for at least 4 years after property is sold.

Purchase Receipts for Stocks, Bonds, Mutual Funds

These should be kept for at least 4 years after asset is sold.

Q: How can I find the status of my federal tax refund?

A: The IRS allows a tax payer to find out the status of his/her federal return on the internet by clicking on the below link, please make sure to have your social security number, filing status, and refund amount on hand to enter.

Where is my Federal refund?

https://sa.www4.irs.gov/irfof/lang/en/irfofgetstatus.jsp

You can also find out information on your Georgia tax refund by clicking on this link:

Where is my Georgia refund?

https://www.etax.dor.ga.gov/WMRefund/index.aspx

Q: What is the Alternative Minimum Tax (AMT) and when does it apply?

A: The Alternative Minimum Tax (AMT) applies if it exceeds the regular tax. Form 6251 is used to report and calculate the AMT. Generally, AMT is calculated by starting with regular taxable income and then adding back, either as adjustments or tax preference items, certain items (such as state and local taxes, personal exemptions, and miscellaneous itemized deductions to determine alternative minimum taxable income (AMTI). The AMT is then computed by applying a flat 26% rate on the first $175,000 of AMTI, and a 28% rate on AMTI in excess of $175,000.

This can be very confusing for people so we at Perry P. Gambrell, Jr., CPA can help you through this process.

Effects of the AMT

According to a report of the Congressional Research Service (CRS) issued on June 14, 2006, personal exemptions (22%), itemized deductions for state and local taxes (48%), and miscellaneous itemized deductions (20%) together account for over 90% of preference items that are subject to tax under the AMT but not subject to tax under the regular income tax. The CRS estimates that, absent legislative change, about 23 million taxpayers will be subject to the AMT in 2007, and about 31 million by 2010. Taxpayers with incomes in the $100,000 to $500,000 income range will be the hardest hit, with 90% of these taxpayers subject to the AMT in 2010. The report also lists the following states, by order of rank, as those with citizens most prone to be subject to the AMT: New Jersey, New York, Connecticut, the District of Columbia, California, Massachusetts, Maryland, Rhode Island, Minnesota, and Oregon. The five states least prone to be subject to the AMT were Tennessee, South Dakota, Alaska, Alabama, and Mississippi.

Q: What are the 2008 contribution limits for retirement plans?

A: The 2008 contribution limits are as follows:
Defined benefit $185,000
Defined contribution $ 46,000
401(k) & 403(b) deferrals $ 15,500
Catch-up limit $ 5,000
Maximum compensation $230,000