Downloadable Audio File: Mileage Rates
WASHINGTON — The Internal Revenue Service today announced an increase in the optional standard mileage rates for the final six months of 2008. Taxpayers may use the optional standard rates to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes.
The rate will increase to 58.5 cents a mile for all business miles driven from July 1, 2008, through Dec. 31, 2008. This is an increase of eight (8) cents from the 50.5 cent rate in effect for the first six months of 2008, as set forth in Rev. Proc. 2007-70.
In recognition of recent gasoline price increases, the IRS made this special adjustment for the final months of 2008. The IRS normally updates the mileage rates once a year in the fall for the next calendar year.
"Rising gas prices are having a major impact on individual Americans. Given the increase in prices, the IRS is adjusting the standard mileage rates to better reflect the real cost of operating an automobile," said IRS Commissioner Doug Shulman. "We want the reimbursement rate to be fair to taxpayers."
While gasoline is a significant factor in the mileage figure, other items enter into the calculation of mileage rates, such as depreciation and insurance and other fixed and variable costs.
The optional business standard mileage rate is used to compute the deductible costs of operating an automobile for business use in lieu of tracking actual costs. This rate is also used as a benchmark by the federal government and many businesses to reimburse their employees for mileage.
The new six-month rate for computing deductible medical or moving expenses will also increase by eight (8) cents to 27 cents a mile, up from 19 cents for the first six months of 2008. The rate for providing services for charitable organizations is set by statute, not the IRS, and remains at 14 cents a mile.
The new rates are contained in Announcement 2008-63 on the optional standard mileage rates.
Taxpayers always have the option of calculating the actual costs of using their vehicle rather than using the standard mileage rates.
Mileage Rate Changes
Purpose
Rates 1/1 through 6/30/08
Rates 7/1 through 12/31/08
Business
50.5
58.5
Medical/Moving
19
27
Charitable
14
14
801-649-5883
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Marina Vialtsina
Showing posts with label taxpayers. Show all posts
Showing posts with label taxpayers. Show all posts
Sunday, July 27, 2008
Friday, July 11, 2008
Foreclosure rescue to pass Senate; House next
Struggling homeowners who can't afford their mortgages and banks facing big losses would get government help under a foreclosure rescue that has broad bipartisan support.
The plan is headed for Senate passage Friday, but faces a bumpy road, with the House planning a rewrite and the White House threatening a veto without major changes.
With the last procedural hurdles scaled Thursday, the package was on track for resounding approval in the Senate. It has drawn broad support in the Senate, reflecting widespread interest by lawmakers in both parties in sending election-year help to struggling homeowners facing tough economic times.
The centerpiece of the plan would let the Federal Housing Administration back up to $300 billion in new loans to give struggling homeowners more affordable, fixed-rate mortgages. It allows lenders who agree to take a substantial loss on the mortgages to reclaim at least some money and avoid a costly foreclosure.
Rep. Barney Frank, D-Mass., the Financial Services Committee chairman and an architect of the bill, said the few but significant revisions House leaders are seeking could be made in as little as one week. Key players are preparing for a week of intense negotiations to resolve differences on Capitol Hill and with the White House, with an eye toward producing a bill President Bush could sign later this month.
The measure includes a long-sought modernization of the FHA and would create a new regulator and tighter controls on Fannie Mae and Freddie Mac, the government-sponsored mortgage giants. It also would provide $14.5 billion in housing tax breaks, including a credit of up to $8,000 for first-time home buyers.
Congressional Democrats are divided over important elements of the plan, including limits on loans the FHA may insure and Fannie Mae and Freddie Mac may buy. The Senate measure sets them at $625,000, while House leaders — including Speaker Nancy Pelosi, D-Calif., — want the cap as high as $730,000.
House leaders also oppose the immediate effective date of the Senate plan, preferring to phase in the new regulations for Fannie Mae and Freddie Mac over six months.
Another key point of dispute is $3.9 billion in the Senate measure for buying and rehabilitating foreclosed properties. The House's band of conservative "Blue Dog" Democrats oppose the money, arguing that it would swell the deficit unless paired with cuts or tax increases to cover the cost.
But many Democrats, particularly members of the Congressional Black Caucus, are fighting to keep the funding, which they say will help prevent the communities hardest hit by the housing crisis from sliding into blight.
The White House singled out the money in its veto threat, calling it a bailout for lenders who helped cause the mortgage meltdown.
Lawmakers and the Bush administration agree on the central concept behind the measure: allowing the government to backstop new mortgages for struggling homeowners.
To make it more palatable to Republicans, the Senate measure would take responsibility for any losses away from taxpayers and instead cover them by diverting an affordable housing fund drawn from Fannie Mae and Freddie Mac profits.
The plan is headed for Senate passage Friday, but faces a bumpy road, with the House planning a rewrite and the White House threatening a veto without major changes.
With the last procedural hurdles scaled Thursday, the package was on track for resounding approval in the Senate. It has drawn broad support in the Senate, reflecting widespread interest by lawmakers in both parties in sending election-year help to struggling homeowners facing tough economic times.
The centerpiece of the plan would let the Federal Housing Administration back up to $300 billion in new loans to give struggling homeowners more affordable, fixed-rate mortgages. It allows lenders who agree to take a substantial loss on the mortgages to reclaim at least some money and avoid a costly foreclosure.
Rep. Barney Frank, D-Mass., the Financial Services Committee chairman and an architect of the bill, said the few but significant revisions House leaders are seeking could be made in as little as one week. Key players are preparing for a week of intense negotiations to resolve differences on Capitol Hill and with the White House, with an eye toward producing a bill President Bush could sign later this month.
The measure includes a long-sought modernization of the FHA and would create a new regulator and tighter controls on Fannie Mae and Freddie Mac, the government-sponsored mortgage giants. It also would provide $14.5 billion in housing tax breaks, including a credit of up to $8,000 for first-time home buyers.
Congressional Democrats are divided over important elements of the plan, including limits on loans the FHA may insure and Fannie Mae and Freddie Mac may buy. The Senate measure sets them at $625,000, while House leaders — including Speaker Nancy Pelosi, D-Calif., — want the cap as high as $730,000.
House leaders also oppose the immediate effective date of the Senate plan, preferring to phase in the new regulations for Fannie Mae and Freddie Mac over six months.
Another key point of dispute is $3.9 billion in the Senate measure for buying and rehabilitating foreclosed properties. The House's band of conservative "Blue Dog" Democrats oppose the money, arguing that it would swell the deficit unless paired with cuts or tax increases to cover the cost.
But many Democrats, particularly members of the Congressional Black Caucus, are fighting to keep the funding, which they say will help prevent the communities hardest hit by the housing crisis from sliding into blight.
The White House singled out the money in its veto threat, calling it a bailout for lenders who helped cause the mortgage meltdown.
Lawmakers and the Bush administration agree on the central concept behind the measure: allowing the government to backstop new mortgages for struggling homeowners.
To make it more palatable to Republicans, the Senate measure would take responsibility for any losses away from taxpayers and instead cover them by diverting an affordable housing fund drawn from Fannie Mae and Freddie Mac profits.
Wednesday, July 9, 2008
Fed plans new rules to protect future homebuyers (part II)
Bear Stearns was eventually taken over by JPMorgan Chase & Co., with the Fed providing $28.82 billion in financial backing.
Those controversial decisions have drawn criticism from Democrats in Congress and elsewhere that the Fed is bailing out Wall Street and putting billions of taxpayer dollars at risk.
Bernanke, in appearances on Capitol Hill has said he doesn't believe taxpayers will suffer any losses.
In his speech Tuesday, the Fed chief defended those actions anew. If the Fed didn't intervene, he said, problems in financial markets would have snowballed, imperiling the country.
"Allowing Bear Stearns to fail so abruptly at a time when the financial markets were already under considerable stress would likely have had extremely adverse implications for the financial system and for the broader economy," Bernanke said to the mortgage forum, organized by the Federal Deposit Insurance Corp.
The Fed's consideration of giving Wall Street firms more time to tap the Fed's emergency loan program is part of an ongoing effort by the central bank to bring back stability to fragile financial markets and help to bolster shaky confidence on the part of investors.
Policymakers — in the White House, in Congress and other federal agencies — will need to work together to come up with ways to make the U.S. financial system more resilient and stable and to prevent a repeat of the types of problems that brought about the end of Bear Stearns, an 85-year-old institution, Bernanke said.
Although those efforts are already under way, it will fall to the next president and next Congress to settle them.
The Bush administration has proposed revamping the nation's financial regulatory structure. That plan would make the Fed an ubercop in charge of financial market stability. But the Fed would lose daily supervision of big banks. Bernanke said the Fed must maintain this power if it is to be an effective overseer of financial stability.
The Fed, which regulates banks, and the Securities and Exchange Commission, which oversees investment firms, announced an information-sharing agreement on Monday aimed at better detecting potential risks to the financial system.
Over the longer term, though, Congress may need to adopt legislation to bolster supervision of investment banks and other large securities dealers, Bernanke said.
Bernanke recommended that Congress give a regulator in the future the authority to set standards for capital, liquidity holdings and risk management practices for the holding companies of the major investment banks. Currently, the SEC's oversight of these holding companies is based on a voluntary agreement between the SEC and those firms.
"Strong holding company oversight is essential," he said.
Bernanke also said that a growing number of central banks in recent years have been given the statutory authority to oversee systems for processing financial transactions by securities firms as well as overseeing traditional banking transactions. "A strong case can be made for granting the Federal Reserve explicit oversight for systemically important payment and settlement systems," he said.
And, the Fed chief favors looking into an idea — raised by Treasury Secretary Henry Paulson — to create formal procedures to make sure that if an investment firm fails it won't wreak havoc on the broader economy. Such procedures, which allow for a more orderly liquidation, are in place for banks.
The housing, credit and financial crises have bruised the economy. Growth has slowed and employers have cut jobs every month so far this year.
Bernanke said that "it is unrealistic to hope" that financial crises can be entirely eliminated, while maintaining an innovative financial system. "Nonetheless, recent experience has illustrated once again that financial instability can have serious economic costs," he said.
Those controversial decisions have drawn criticism from Democrats in Congress and elsewhere that the Fed is bailing out Wall Street and putting billions of taxpayer dollars at risk.
Bernanke, in appearances on Capitol Hill has said he doesn't believe taxpayers will suffer any losses.
In his speech Tuesday, the Fed chief defended those actions anew. If the Fed didn't intervene, he said, problems in financial markets would have snowballed, imperiling the country.
"Allowing Bear Stearns to fail so abruptly at a time when the financial markets were already under considerable stress would likely have had extremely adverse implications for the financial system and for the broader economy," Bernanke said to the mortgage forum, organized by the Federal Deposit Insurance Corp.
The Fed's consideration of giving Wall Street firms more time to tap the Fed's emergency loan program is part of an ongoing effort by the central bank to bring back stability to fragile financial markets and help to bolster shaky confidence on the part of investors.
Policymakers — in the White House, in Congress and other federal agencies — will need to work together to come up with ways to make the U.S. financial system more resilient and stable and to prevent a repeat of the types of problems that brought about the end of Bear Stearns, an 85-year-old institution, Bernanke said.
Although those efforts are already under way, it will fall to the next president and next Congress to settle them.
The Bush administration has proposed revamping the nation's financial regulatory structure. That plan would make the Fed an ubercop in charge of financial market stability. But the Fed would lose daily supervision of big banks. Bernanke said the Fed must maintain this power if it is to be an effective overseer of financial stability.
The Fed, which regulates banks, and the Securities and Exchange Commission, which oversees investment firms, announced an information-sharing agreement on Monday aimed at better detecting potential risks to the financial system.
Over the longer term, though, Congress may need to adopt legislation to bolster supervision of investment banks and other large securities dealers, Bernanke said.
Bernanke recommended that Congress give a regulator in the future the authority to set standards for capital, liquidity holdings and risk management practices for the holding companies of the major investment banks. Currently, the SEC's oversight of these holding companies is based on a voluntary agreement between the SEC and those firms.
"Strong holding company oversight is essential," he said.
Bernanke also said that a growing number of central banks in recent years have been given the statutory authority to oversee systems for processing financial transactions by securities firms as well as overseeing traditional banking transactions. "A strong case can be made for granting the Federal Reserve explicit oversight for systemically important payment and settlement systems," he said.
And, the Fed chief favors looking into an idea — raised by Treasury Secretary Henry Paulson — to create formal procedures to make sure that if an investment firm fails it won't wreak havoc on the broader economy. Such procedures, which allow for a more orderly liquidation, are in place for banks.
The housing, credit and financial crises have bruised the economy. Growth has slowed and employers have cut jobs every month so far this year.
Bernanke said that "it is unrealistic to hope" that financial crises can be entirely eliminated, while maintaining an innovative financial system. "Nonetheless, recent experience has illustrated once again that financial instability can have serious economic costs," he said.
Tuesday, July 1, 2008
Market Update
MMG Update - Friday, June 27, 2008 10:59am ET
Current Trend Direction: Sideways
Risks Favor: Cautiously Floating
Current Price of FNMA 6% Bond: $100.59, +19bp
On the heels of the Fed decision to leave the Fed Funds Rate unchanged, their favored gauge of inflation arrived this morning, the Core Personal Consumption Expenditure (PCE) reading. The Core PCE rose 0.1% during May, lower than expectations of 0.2% - which left the closely watched year-over-year Core inflation rate at 2.1%. This is outside the Fed's desired range of 1 - 2%, but tolerable in light of the ongoing inflation fears...which has to come as a relief to the Fed.
Also embedded in the PCE report are readings on Personal Income and Spending, which both grew at rates larger than estimates in May. The boost in spending was likely due to the stimulus checks that were sent out to many American taxpayers in the beginning of May.
Oil hit a record high of $142.26 this morning and the inflationary fears inherent in rising oil prices are keeping a lid on both Stocks and Bonds. Stocks have been downright ugly, as the Dow is poised for the worst June since the Great Depression. But at the same time, Mortgage Bonds haven't performed well either...inflation is bad news for both Stocks and Bonds.
The University of Michigan's Consumer Sentiment index fell to 56.4 in June, from 59.6 in May. It's the lowest since 1980 and the third-lowest reading in the 56-year history of the survey. Mortgage Bonds are being helped by this poor economic news.
The ceiling of resistance at $100.47 is being tested again, but has been difficult to break of late. This gives us extra reason for a cautious approach this morning, as we want to see if prices can break above this barrier...but also must remain on guard, because a reversal from this level leaves a long way down before the next floor of support. Take a look at the Bond Page, and you can see how Bond prices have been unable to overcome the $100.47 ceiling, even in the face of a nearly 400 point decline in the Stock market yesterday, which should have pushed some money over into Bonds. We can carefully Float for now, but be ready to Lock as this formidable level of resistance could push prices lower still.
Current Trend Direction: Sideways
Risks Favor: Cautiously Floating
Current Price of FNMA 6% Bond: $100.59, +19bp
On the heels of the Fed decision to leave the Fed Funds Rate unchanged, their favored gauge of inflation arrived this morning, the Core Personal Consumption Expenditure (PCE) reading. The Core PCE rose 0.1% during May, lower than expectations of 0.2% - which left the closely watched year-over-year Core inflation rate at 2.1%. This is outside the Fed's desired range of 1 - 2%, but tolerable in light of the ongoing inflation fears...which has to come as a relief to the Fed.
Also embedded in the PCE report are readings on Personal Income and Spending, which both grew at rates larger than estimates in May. The boost in spending was likely due to the stimulus checks that were sent out to many American taxpayers in the beginning of May.
Oil hit a record high of $142.26 this morning and the inflationary fears inherent in rising oil prices are keeping a lid on both Stocks and Bonds. Stocks have been downright ugly, as the Dow is poised for the worst June since the Great Depression. But at the same time, Mortgage Bonds haven't performed well either...inflation is bad news for both Stocks and Bonds.
The University of Michigan's Consumer Sentiment index fell to 56.4 in June, from 59.6 in May. It's the lowest since 1980 and the third-lowest reading in the 56-year history of the survey. Mortgage Bonds are being helped by this poor economic news.
The ceiling of resistance at $100.47 is being tested again, but has been difficult to break of late. This gives us extra reason for a cautious approach this morning, as we want to see if prices can break above this barrier...but also must remain on guard, because a reversal from this level leaves a long way down before the next floor of support. Take a look at the Bond Page, and you can see how Bond prices have been unable to overcome the $100.47 ceiling, even in the face of a nearly 400 point decline in the Stock market yesterday, which should have pushed some money over into Bonds. We can carefully Float for now, but be ready to Lock as this formidable level of resistance could push prices lower still.
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