eBulletin

eBulletin is a complimentary service to our clients and friends to provide individual and business tax information throughout the year via short emails. If you would like to receive our eBulletin, simply email Michelle Noonan at michellen@bb-cpa.com and insert "eBulletin" in the subject line. You will be added to the list. We do not share our lists.

eBulletin 2008-4

March 28, 2008

Louisiana State Tax Holiday

On May 24th and 25th of this year, Louisiana will hold a sales tax holiday on sales of hurricane preparedness items. During this two-day period, the first $1,500 of the sales price of qualifying merchandise is sales tax free.

The Louisiana Department of Revenue has now issued guidance on this holiday (Revenue Information Bulletin No. 08-013. Excerpts from this RIB follow.

Items eligible for this sales tax holiday are the following: each portable self- powered light source; portable self-powered radio, two-way radio, or weather band radio; tarpaulin or other flexible waterproof sheeting; any ground anchor system or tie-down kit; any gas or diesel fuel tank; any package of AAA-cell, AA- cell, C-cell, D-cell, 6-volt, or 9-volt batteries, excluding automobile and boat batteries; any cell phone battery and any cell phone charger; any non-electric food storage cooler; any portable generator used to provide light or communications or preserve food in the event of a power outage; any "storm shutter device", as defined in the Act; any carbon monoxide detector; and any blue ice product.

The sales tax holiday does not extend to hurricane-preparedness items or supplies purchased at any airport, public lodging establishment or hotel, convenience store, or entertainment complex.

A customer will be eligible for the sales tax exemption if during the two days of each annual holiday:

• He/she buys and accepts delivery of eligible hurricane-preparedness items or supplies;
• He/she places eligible items or supplies on layaway;
• He/she makes final payment on and withdraws eligible items or supplies previously placed on layaway; or
• He/she orders an eligible item for immediate delivery, even if delivery must be delayed, provided that the customer has not requested delayed shipment.

Purchases of eligible items or supplies during the holiday with “rain checks” issued before the holiday are eligible for exemption, but purchases after the holiday with “rain checks” issued during the holiday are not eligible for exemption.

The post-holiday exchange of merchandise to effectuate changes in size, color, or correction of defects does not create a tax liability, but exchanges after the holiday for dissimilar items will be considered the purchase of new property on which the sales tax will be payable.

Disclaimers: This written advice is not intended or written to be used, and it cannot be used by any taxpayer, for the purpose of avoiding penalties that may be imposed on the taxpayer. This eBulletin contains general information and cannot substitute for individual consultation. You should obtain professional advice before making financial business or tax decisions.

eBulletin 2008-2

February 15, 2008

Stimulus Legislation Rebate Information

The IRS has created a new webpage about the economic stimulus payments created by the recent legislation (see eBulletin 2008-1). This webpage can be found at

http://www.irs.gov/irs/article/0..id=177937.00.html.

You can also find this webpage by going to the IRS homepage (www.irs.gov) and clicking “Rebate Questions?”. The new webpage includes a link to a frequently asked questions (FAQ) section and other useful information.

A taxpayer must file a 2007 income tax return to qualify for the rebate.

Low income taxpayers, including people whose income consists almost entirely of Social Security payments, are normally are not required to file tax returns. However, under the new law, many of these same low-income workers, recipients of Social Security, certain veterans’ benefits and certain Railroad Retirement benefits will qualify for a rebate. They, too, must file 2007 income tax returns to receive the rebate. The website includes special instructions for these taxpayers.

BB Recommends: The IRS has indicated that it may begin mailing checks in May. However, you will not get a rebate, even if you otherwise qualify, until you file your 2007 return. This is not a year for qualifying taxpayers to delay preparation of their returns. This is also a year to consider direct deposit of any federal refund. The IRS will then direct deposit your rebate payment as well.

Disclaimers: This written advice is not intended or written to be used, and it cannot be used by any taxpayer, for the purpose of avoiding penalties that may be imposed on the taxpayer. This eBulletin contains general information and cannot substitute for individual consultation. You should obtain professional advice before making financial business or tax decisions.

eBulletin 2008-1

February 8, 2008

Congress Passes New Stimulus Legislation

Congress has passed an economic stimulus bill designed to put additional cash in qualifying taxpayers’ pockets. The legislation actually creates a new credit to be claimed on your 2008 return. However, qualifying taxpayers will receive this credit in advance, most over the next few months.

New Credit on Your 2008 Tax Return - Basically, if you qualify, you will be able to claim a new credit on your 2008 tax return, due in April 2009. The credit will be as high as $600 ($1,200 for a joint return). While the credit will normally be no more than your net income tax liability, qualifying taxpayers will be eligible for a minimum credit of no lower than $300 ($600 in the case of a joint return). Qualifying taxpayers include taxpayers who have earned income, Social Security benefits and veterans benefits of at least $3,000 in 2008. This latter provision means, for example, that older taxpayers with just Social Security income will qualify for the credit, even if they do not pay any income tax in 2008.

The amount of the credit will be increased by $300 for each qualifying child.

The amount of the credit is phased out at a rate of 5% of your adjusted gross income above $75,000 ($150,000 for joint returns). (Adjusted gross income is the amount at the bottom of page 1 on your return). Thus, higher income taxpayers will not be eligible for the credit (or the rebate to be discussed below).

Nonresident aliens, estates or trusts, and dependents are not eligible for the credit. Further, taxpayers and eligible children must have valid Social Security numbers. A taxpayer with a taxpayer identification number (ITIN) will not qualify.

Rebate Checks - Most taxpayers eligible for the credit will receive it in the form of an advance payment from the IRS, to be issued beginning as early as this May. The IRS will, however, compute your rebate check based on your 2007 individual tax return. Otherwise, the rebate will be computed in the same way as the 2008 credit.

If you receive a rebate check that is less than the amount of the credit you ultimately compute when you prepare your 2008 tax return, you will be able to claim the remaining credit when you file that return. If you receive a rebate check that is more than the amount of the credit you compute on your 2008 return, you will be able to keep the difference; you are not required to return the excess rebate.

BB Recommends: Even if you qualify for a rebate, you will not receive it until you file your 2007 income tax return. Thus, putting your return on extension will delay the timing of your rebate. Qualifying taxpayers should file their 2007 returns as soon as feasible.

This written advice is not intended or written to be used, and it cannot be used by any taxpayer, for the purpose of avoiding penalties that may be imposed on the taxpayer

Disclaimer: This eBulletin contains general information and cannot substitute for Individual consultation. You should obtain professional advice before making financial business or tax decisions.

Previous eBulletins have been archived by year and are available here:

2007 • 2006 • 2005