Monday, June 27, 2011

AMT Reform

A group called ReformAMT is campaigning to eliminate the Alternative Minimum Tax on Incentive Stock Options. There is generally no regular tax when a person exercises ISO's, but the AMT on it can sometimes be substantial. People who are whacked with this tax don't like it, especially since it often comes as quite a surprise. Also, the transaction on which they are being taxed did not put any money in their pocket. (So how are they supposed to pay the tax??) Go to www.reformamt.org to find out what they are up to.

Mileage rates

The standard mileage rate for business vehicle use is 55.5 cents for the July-Dec, 2011 period. For Jan-June, 2011, the rate was 51 cents per mile.

Other rate changes:
Medical miles: Jan-June = 19 cents; July-Dec = 23.5 cents
Moving expense miles: same as Medical miles

The rate for Charity miles remains 14 cent per mile.

Sunday, June 19, 2011

Earned Income Credit

The IRS has been concerned for some time with abuse of the Earned Income Credit. They have adopted a number of rules and requirements to combat that abuse. Tax preparers will probably have more hoops to jump through in coming years to substantiate the validity of the credit claimed. Some checklists exist which have been used voluntarily, but they may become required forms. No exact timetable has been given for such changes.