Tax planning is time-sensitive: It may be time to review your plan
The current sagging interest rates create opportunities for favorable tax planning results. Each month, the IRS establishes interest rates that are used for a variety of purposes. Based on the premise that investors earn only a rate of return measured by current interest rates, taxpayers may transfer wealth from one generation to the next without the imposition of significant gift or estate tax. (Summer 2008)

Surviving spouse home sale exclusion liberalized
Before a change in the law late in 2007, an exclusion of up to $500,000 of gain on the sale of a principal residence was available only to taxpayers who filed a joint return and met certain other tests. Under the change in the law, effective in 2008, the surviving spouse now may use the full $500,000 exclusion as long as the sale occurs not later than two years after the date of death of the other spouse. (Summer 2008)

Electronic tax payment offers many advantages
The Electronic Federal Tax Payment System is a free system used by both businesses and individuals to pay their federal tax liability. While many employers hire an outside payroll company to take care of their payroll tax obligations, including the remittance of payroll taxes, it makes sense to enroll in the electronic system. When the employer enrolls, it should obtain a separate personal identification number (PIN). The payroll company may have a contractual obligation to make the payroll taxes on behalf of the business. However, it is ultimately the employer who is responsible to make sure that all payroll taxes are paid in the correct amount and in a timely manner. (Summer 2008)

Kiddie tax changes warrant re-examining portfolio
Until recently, the so-called "kiddie" tax was applicable to minors under age 14. Recent legislation expanded the scope of this tax for 2008 income tax returns to children under age 19, or under age 24 if a full-time student. The tax is assessed at the parents' tax rate on unearned income in excess of $1,800. (Summer 2008)

Congress passes economic stimulus package
Responding to a challenge from President Bush issued on Jan. 18, Congress passed the Economic Stimulus Act of 2008 on Feb. 7. The president signed the new law on Feb. 13, less than one month after his original proposal. In calling on Congress to enact a stimulus package, the President set forth four goals: The stimulus should be big enough to make a difference in an economy as large and dynamic as the U.S. economy. The package should provide broad-based tax relief that will directly affect economic growth, rather than increased federal spending. The relief should be temporary and take effect immediately. The package should not include tax increases. Congress responded with a two-part stimulus package that includes tax rebate checks for individuals and enhanced depreciation write-offs for businesses. (Special Spring)