July 2008

LESS PAPER?
Electronic data storage is, of course, becoming more and more prevalent and affordable. Many of us receive our bank statements in electronic format rather than on paper. Investment portfolio reports are likewise available in electronic format, alleviating the use of paper copies and some of the attendant problems of storage. And, as you might expect, we are storing more and more		of our firm’s file information electronically rather than on paper. A spin-off benefit of electronic data storage is that we are easily able to provide you a copy of your income tax returns as a portable document format (PDF) file.       If you are interested in receiving an electronic copy of the returns that we prepare for you please let us know.
________________________________________________________ LOUISIANA TAX REDUCTIONS
With fanfare, Louisiana Governor Bobby Jindal recently signed legislation that reduces personal income tax rates in certain tax brackets to the same percentage in place prior to the enactment of the Stelly Plan. Unfortunately, the effects of the repeal of Stelly will not be noticed until next year since the change becomes effective for 2009. Further, the withholding tables for personal income tax will not be amended by the Department of Revenue until after July 1, 2009. Regardless of the delay in the effective date of this tax reduction, however, the repeal of the Stelly Plan is a much-welcomed event to the Louisiana taxpayers who were most adversely affected.           As we have mentioned several times in past newsletters, the Louisiana gift tax faded into the sunset on June 30, 2008. On July 1, 2008, the only transfer tax remaining for Louisiana taxpayers is the federal tax. When applicable, the federal tax is significant as it is 41 to 45 percent of the taxable base.		Louisiana taxpayers are now able to make gifts in excess of the federal annual exclusion ($12,000 per donee per donor per year) and up to $1 million (lifetime – one time) without any gift taxes. Gift amounts above the annual exclusion and above the $1 million one-time exclusion will remain subject to federal tax with a top rate of 45 percent. Gifts in excess of the annual exclusion and up to $1 million will consume the donor’s federal lifetime transfer tax exemption. The early use of the federal lifetime transfer tax exemption of $1 million has long been very helpful in reducing total transfer taxes by removing future appreciation from the death tax base, but to now has been discouraged by the Louisiana tax cost of such transfers. The repeal of the Louisiana gift tax removes that cost from transfers. We continue to encourage the early use of the $1 million lifetime exemption along with maximum use of the annual exclusion in estate planning. We will be happy to answer your questions.
________________________________________________________ HAVE YOU RECEIVED YOUR INCOME TAX REFUND?
Have you received your income tax refund? If not, both the Internal Revenue Service and the Louisiana Department of Revenue have automated telephone systems that allow taxpayers to check on the status of their individual income tax refunds. The telephone number for the Internal Revenue Service’s automated system is 1-800-829-4477. To obtain information about your refund, you will need to have available a copy of your 2007 income tax return because you will need to know the first Social Security number shown on the return, the filing status shown on the return, and the exact whole dollar amount of the refund claimed. This service is available seven days a week, 24 hours a day.         You can also obtain the status of your federal refund online. To do so, go to www.irs.gov When the Internal Revenue Service’s home page appears, click on “where’s my  refund?”  On  the  next  page,   click  on  “where’s  my		refund?” and then provide the requested information (Social Security number, filing status, and refund amount).         If you are experiencing a delay in receiving your economic stimulus check, you can visit the Internal Revenue Service’s website www.irs.gov to obtain a payment schedule for the issuance of the checks. In addition, you can also call the  toll-free rebate hotline at 1-866-234-2942.         The telephone number for the automated Louisiana system is 1-888-829-3071. You will need the primary Social Security number shown on the return and the amount of the refund claimed to obtain the status of your refund. As with the federal system, taxpayers can access the Louisiana system 24 hours a day, including weekends.
________________________________________________________ GASOLINE PRICES DRAW IRS ADJUSTMENT             The Internal Revenue Service has responded to the increase in gasoline prices with an increase in the optional Standard Mileage Rates for the second half of 2008. For business miles driven from July 1, 2008 through December 31, 2008, the Standard Mileage Rate will be 58.5 cents per mile, up 8 cents from the rate for the first half of the year of 50.5 cents per mile. The IRS has likewise increased the Standard Mileage Rate for medical travel and moving expenses from 19 cents per mile to 27 cents per mile for those miles driven between July 1, 2008 and December 31, 2008. The Standard Mileage Rate that applies to the deduction for the use of a vehicle for charitable purposes remains unchanged at 14 cents per mile.   ________________________________________________________