Happy Holidays!

From everyone at ThomasYork, we wish you a Happy Holiday Season.

Please note that our office will be closed starting at noon on Wednesday, December 24th until Thursday, January 1st. We will resume our normal business hours on Friday, January 2, 2009.

Congratulations AJ and Taryn

Taryn Woolley (a staff accountant) and his wife Becky gave birth to a beautiful baby girl, Mikayla Woolley on Nov. 4, 2008 at 9:57am. Mikayla weighed 6 lbs and 12oz. Both mother and daughter are doing well.

Abhinesh Jit (AJ), a staff accountant, and his wife Mandy also gave birth to a beautiful baby girl, Avani Jit on Nov. 7, 2008 at 10:17am. Avani weighed 7 lbs and 11oz. The Jit Family are all tired but are doing well.

New Mileage Rates For 2009

Well the good news is the cost of a gallon of gas has gone down significantly since this past summer, but the bad news is the IRS knows this. Here are the newly released Standard Mileage Rates that go into effect on January 1, 2009.

• Standard business mileage rate will be $.55 per mile
• Standard medical and moving mileage rate will be $.24 per mile
• Standard charitable mileage rate will be $.14 per mile

Don't forget to update your expense reports in January.

Happy Thanksgiving!

2008 California Tax Law Changes

Read on for some changes that will effect your 2008 California income tax returns. For those of you with Net Operating Losses you were planning on using this year you may need to make estimated payments now. Please call us if you have any questions about these or other tax issues.

Happy Reading.

2008 California Tax Law Changes

Compiled by Monica A. Lawver, CPA

The California state governor signed the new budget on September 30, 2008, which includes several tax-related changes. The law makes the following key changes:

• Limits business tax credits to 50% of net tax (before credits) for tax years 2008 and 2009.
• Suspends NOL deductions for 2008 and 2009.
• Requires the LLC fee to be estimated and paid 10 months before the current due date of the return, and imposes a 10% underpayment penalty. Thus, calendar-year LLCs will pay their 2008 LLC fee by April 15, 2009, and their estimated 2009 fee on June 15, 2009.
• Accelerates the required payment of estimated payments. The law changes estimate payment percentages to 30% of the annual tax liability for the 1st and 2nd estimate payment installments and 20% of the annual tax liability for the 3rd and 4th installments under both personal income tax and corporation income tax law for tax years on or after January 1, 2009.
• Eliminates prior year safe harbor for high income individual taxpayers. Starting in 2009, the law eliminates the option of using 110% of the prior year's tax to compute the required annual payment for taxpayers with AGI of $1 million or more ($500,000 in the case of a married individual filing a separate return). These taxpayers must make estimated payments based on current year income.
• Makes electronic payment mandatory for high-income individuals. Individual taxpayers with estimated tax or extension payments over $20,000, or with tax liabilities over $80,000, must pay electronically (e-pay). The mandatory e-pay requirement is based on estimated tax or extension payments made or tax returns you file for taxable years beginning on or after January 1, 2009. After a taxpayer makes a payment or files a return that meets the threshold, the FTB should send a “courtesy notice” instructing the taxpayer to make all future payments electronically. More information is available on the FTB website at: http://www.ftb.ca.gov/individuals/Mandatory_e-pay.shtml.

New Reporting Requirements for Employer-Owned Life Insurance

Outlined below are the reporting requirements for Employer Owned Life Insurance policies. The rules are not new but are often not adhered to. As part of our tax preparation this year we will be asking for the information outlined below for all applicable policies. If you have any questions about your policies call us.

Generally, a policyholder owning one or more employer-owned life insurance contracts issued after August 17, 2006, is required to file Form 8925 for each tax year the contract(s) is owned. For life insurance contracts issued before Aug. 18, 2006, there were no reporting rules applicable to employer-owned life insurance contracts. Form 8925 is filed with the employer’s annual income tax return. The following information must be reported on Form 8925:

• The total number of employees at the end of the tax year.
• The number of employees insured at the end of the tax year under employer-owned life insurance contracts issued after August 17, 2006.
• The total amount of employer-owned life insurance in force on those employees at the end of the tax year.
• Indication that the “applicable policyholder” has a valid consent for each insured employee (or, if all required consents are not obtained, the number of insured employees for whom consent was not obtained).

Emergency Economic Stabilization Act of 2008

This tax information was compiled by one of our Tax Managers, Monica A. Lawver, CPA. On Oct. 3, 2008, President Bush signed into law H.R. 1424 (P.L. 110-343, the Act). The measure originally was designed to carry only the $700 billion financial industry bailout plan, but at the last minute, to increase its odds of passage, it was amended to include a series of tax bills. Below is a summary of the Act’s key tax provisions, followed by a discussion of each: Individual Taxpayers 1. Expansion of energy credits 2. Enactment of temporary AMT relief 3. Extension of other miscellaneous deductions Business Taxpayers 4. Expansion of energy and research credits To read the complete article please click here: http://www.ty-llp.com/emergency_stabilization.html You can also view past and current newsletters on our website, www.ty-llp.com, under our News & Events page.