• INTERNAL REVENUE SERVICE MAILING ADDRESSES
  
  ADDRESSES FOR TAX RETURNS AND PAYMENTS 
  
  Mail returns and payments to the following addresses.
  Taxpayers should use the label and envelope in their tax packages if available.
  
  The first line of the address should be:
•  Internal Revenue Service Center
  
  If you live in OHIO ...
  
  and you are filing a Form 1040 and you ARE NOT ENCLOSING A PAYMENT, then use this address
• P.O. Box 970011
• St. Louis, MO  63197-0011
  
  If you ARE ENCLOSING A PAYMENT,
• P.O. Box 970011
• St. Louis, MO  63197-0011
  
•           1040-ES
• P.O. Box 97000
• St. Louis, MO  63197-0006

There are  new tax bills issued on a regular basis.  We will continue to keep you up to date on many of the changes.

IRA Contribution Limits .................. 1
401(k) and 403(b)Contribution Limits........... 2
SIMPLE Contribution Limits ................. 3
Increase 457 Plans Contribution Limits ................. 6
Increase Self-employed Contribution and Benefits Limits..7
Greater Flexibility in Rollovers ..................8
Faster Vesting of Employer Matching Contributions .......9
Roth Contribution Programs ............................10
Retirement Savings for Lower Income Taxpayers ...........11
Tax Credits for Small Employers to Start or Increase Retirement Plans .................................12
Education Tax and Saving Incentives .....................13
Educational IRA ........................................14
529 Saving Plans .......................................15
Educational Assistance Income Exclusion ................16
Lessen the Restrictions on the Student Loan Interest Deduction ..............................................17
Allowable Deduction for Higher Education Expenses .......18
Estate Planning Incentives ..............................19
Increase of Uniform Exemption Amount and Phase out of Estate Taxes ...................................................20
Reduced Gift Tax ........................................21
Carryover of Step Up in Basis ...........................22
Modifications to Estate Tax Provisions During Phase Out .23
New Reporting Requirement for Gift and Transfers ........24
Generation-Skipping Transfer Tax Rules ..................25
Retroactive Allocation of GST Exemption .................26
Family Deduction and Credits ............................27
Marriage Penalty Relief .................................28
Increases and Simplification of Earned Income Credit ....29
Doubling Child Tax Credit ...............................30
Extension and Expansion of Adoption Tax Benefit .........31
Expansion of Dependent Care Tax Credit ..................32
Increase the tax Exemption for Joint Filers .............33
Who Is Impacted by the Alternative Minimum Tax ..........34
Miscellaneous ...........................................35
Individual Income Tax Rate Changes ............36
Phase-Out of Restrictions on Personal Exemptions and Itemized Deductions ..............................................31
Holocaust Survivor ..................................32
Presidentially Declared Disasters ........33

As you may have read or heard, built into this tax bill is an automatic repeal date: the year 2011. 

1 IRA CONTRIBUTION LIMITS - The maximum amount that could be contributed to a traditional IRA account and a Roth IRA  is as follows: 
2008 $5,000 $6,000  if over 50
2009 $5,000, $6,000 if over 50

2. 401(K) AND 403(B) CONTRIBUTION LIMITS
Maximum Deferral Limit Maximum Deferral Limit
2008 $15,500 & $21,500 for catchup
2009 $16,500 & 22,000 for catchup

3. SIMPLE CONTRIBUTION LIMITS - Increases the limits on contributions to SIMPLE plans (maintained by employers with fewer than 100 employees and no other retirement plan): 
2009 $11,500  & $14,000 for catchup

4  457 PLANS CONTRIBUTION LIMITS - Increase the limits on deferrals to section 457 plans: 
2008 $15,500 & $21,000 for catchup provision
2009 $16,500 & $22,000 for catchup provision

If you are self-employed and have a SEP-IRA or a KEOGH, in 2008 the annual limit to defined contribution plans increases to $46,000 and to $49,000 in 2009.

The maximum compensation that can be considered for determining all benefits under qualified plans is increased  to $230,000 for 2008 and $245,000 for 2009. 

5. GREATER FLEXIBILITY IN ROLLOVERS - Effective in 2002, rollover distributions can be made from any type of qualified retirement plan, 403(b) annuity or section 457 plan to any other such plan rather than just IRA's. Additionally, distributions from an IRA would be permitted to be rolled over into one of those plan types. Employee after-tax contributions can be rolled over into another qualified plan or traditional IRA; this was not permitted under previous tax law. Certain restrictions would apply.

The act also allows surviving spouses to roll over distributions, gives the IRS authoriity to waive the "60-day" rollover rule upon a showing hardship, and provide automatic rollover of any automatic cashout distribution of at least $1,000 into an IRA. Although the rules for rollover contributions are substantially liberalized, rollovers are not possible if the individual cannot receive a distribution form the plan or if the recipient plan does not authorize the rollover contribution. 

6.  FASTER VESTING OF EMPLOYER MATCHING CONTRIBUTION - Matching contributions made after 2001 must become fully vested after an employee has completed three years of service (down from five years)or must become vested in increments of 20 percent each year beginning with the employee's second year of service , with full vesting after six years of service (down from seven) 

7  ROTH CONTRIBUTION PROGRAMS - Effective in 2006, the Tax Relief Act allows employers to create a new type of elective deferral program called the "Qualified Roth Contribution program." This program allows participants contributing to a 401(k) plan or 403(b) annuity program the option to designate a portion of their contribution as Roth contributions. The Roth deferrals are not income tax excludable. 
 
8.  RETIREMENT SAVINGS FOR THE LOWER INCOME TAXPAYERS - if your adjusted income is low enough and you meet other eligibility requirements, you will receive a tax credit of up to 50% for your contribution to an IRA, 401 (k) plan, tax-deferred annuity under section 403(b), and 477deferred compensation plan of a state or local government. The maximum contribution that would be available as a basis for the credit would be $2,000. The credit would be in addition to any deduction or exclusion that otherwise applies to the contribution. The credit would be available to persons over 17 and under 60 years of age, other than those who are full-time students or who are claimed as a dependent on someone else's return. Distributions from retirement plans received can reduce the amount of the credit.  

9.  EDUCATION TAX AND SAVING INCENTIVESHOW TAX REFORM MAKES SAVING FOR COLLEGE EASIER
The Act provides roughly $29 billion in direct tax and saving incentives to help towards funding education. For parents and grandparents who are saving or currently paying for children's educational expenses (either college or, as of 2002, secondary or primary school educational expenses), there are new and quite beneficial privileges for you in the bill as well. 

10.  EDUCATIONAL IRA - Effective 2002, the annual limit has increase to $2,000 making it now an effective savings vehicle. For the first time ever, starting in 2002, contributions and earnings can be used to pay for educational expenses for grades K-12 as well as for college expenses. Qualified educational expenses now include: tuition, academic tutoring, special needs services, books, supplies, room and board, uniforms, transportation, supplementary items or service (such as extended day programs), and the purchase of any computer technology, equipment, or internet access. (Computer software primarily involving sports, games, or hobbies is not considered a qualified school expense unless it is educational in nature). Although the money you contribute to an Education IRA is still not tax deductible,  he earnings will be tax free if spent on qualified educational expenses. 

11.     529 SAVINGS PLANS - Under the new law, starting in 2002, any earnings that accumulate in any section 529 college-savings plan will be income-tax free when used to pay qualified expenses for a child's higher education, including payments for tuition, fees, room and board, and books. You can still participate in a 529 plan no matter your household income. Programs allow funding ranging from $15 per month to a total of $250,000, over time or at once. Up to $50,000 by singles or $100,000 married, filed jointly may be contributed at once without a gift tax (assuming no other gifts to same beneficiary within 5 years) for use at the college or grad school of your choice (private or public; in state or out-of state). .By the way, given this new tax advantage for Section 529 plans, there is now no reason whatever to save for college via a Uniform Gifts to Minors (UGMA) or a Uniform Transfer to Minors (UTMA) account. In my opinion, these accounts are now obsolete.

12.  EDUCATIONAL ASSISTANCE INCOME EXCLUSION
Effective in 2002, the Tax Relief Act extends the employee exclusion from income of employers-provided educational assistance. The education assistance amount is up to $5,250 annual and can cover tuition, fees, books, supplies, but not room and board. The education does not have to be work related for the exclusion to qualify but the employer must maintain the program. This provision was expiring at the end of 2001 but is now permanent and expanded to cover graduate studies which have not qualified for the exclusion since June 30, 1996.

13  LESSEN THE RESTRICTIONS ON THE STUDENT LOAN INTEREST DEDUCTION - The Tax Relief Act allows student loan interest on qualified educational or refinanced loans -- deducted from filers taxable income. The maximum allowable annual deduction is $2,500. No deduction is allowed to an individual if that individual is claimed as a dependent on another taxpayer's return for that taxable year. There is no longer a limit on the term of the loan (old law was first sixty months) or restrictions for voluntary payments while the loan is deferred or forbearance. If your adjusted gross income is $100,000 for married, joint filers or $50,000 for single filers you can deduct the full amount of interest paid each year (not to exceed $2,500) Taxpayers with adjusted gross income between $100,00 - $130,000 for married, joint filers and $50,000 - $65,000 for single filers are able to deduct a portion of the interest paid. Income levels will be adjusted annually for inflation.

14 ALLOW DEDUCTION FOR HIGHER EDUCATION EXPENSES - Beginning in 2002, for the first time, up to $3,000 annually (rising up to $4,000 annually in 2004) of any money you spend directly on qualified higher education expenses will be deductible from your income on your tax return, if your are income eligible. Lifetime Learning credits and this deduction in the same year. In some circumstance, a higher education deduction may provide a greater tax relief than a HOPE or Lifetime Learning credit. This will occur if the taxpayer's income is above the income phase-out for the HOPE and Lifetime Learning credits. Even credit-eligible taxpayers may find the deduction more advantageous than the Lifetime Leaning credit, if their income is taxable above the 15 percent bracket. Taxpayers need to evaluate which benefit is most appropriate. Let me stress once again that these new education benefits are set to expire in 2011 and may be repealed at any time before them. So please, please, please learn about them now and act on them immediately. 

15.   INCREASES AND SIMPLIFICATION OF EARNED INCOME CREDIT - After 2008 the $3,000 amount will be adjusted annually for inflation. The definition of earned income is simplified by excluding nontaxable employee compensation for income credit purposes.  Beginning in 2004, the IRS is authorized to use math error authority to deny the earned income credit if the Federal case Registry of Child Support Orders indicates the taxpayer is the noncustodial parent of the child with respect to who, the credit is claimed. DOUBLING CHILD TAX CREDIT The child tax credit will double from $500 to $1000 over the next ten years. FOR TAXABLE YEAR PER CHILD CREDIT INCREASES TO:
2009 $800
2010 and later $1,000

16.   EXTENSION AND EXPANSION OF ADOPTION TAX BENEFITS - Effective in 2002, the adoption credit with respect to children other than those with special needs is permanently extended (it was due to expire after 2001). In addition:  The maximum credit (and employer-benefits exclusion) is increased to $10,000 per eligible child, for both special needs children and other children.  The income phase-out range applicable to the credit and the exclusion is increased to modified adjusted gross income between $150,000 and $190,000 o The adoption credit is allowed against the alternative minimum tax. In the case of a special needs adoption, effective in 2003, the $10,000 credit for a special needs adoption will be available in the year that the adoption is finalized, regardless of whether the taxpayer has any qualified adoption expenses.

18.   EXPANSION OF DEPENDENT CARE TAX CREDIT
The Tax Relief Act increase the maximum amount of eligible employement-reIated expenses to $3,000 for one dependent (up from $2,400) and to $4,800 to $6,000 for two or more dependents. The maximum dependent care credit is increased to 35% of qualified care expenses (the old law was 30% of expenses). The dependent care credit phased-down is increased to $15,000 of adjusted gross income (the old law decreased once adjusted gross income reached $10,000). 

19.   WHO IS IMPACTED BY THE ALTERNATIVE MINIMUM TAX
Taxpayers who are vulnerable to the AMT have to calculate their taxes under both the regular tax and AMT The AMT will increasingly impact upper middle class taxpayers. 

20.   MISCELANEOUS INDIVIDUAL INCOME TAX RATE CHANGES  - 10% 25% 28% 33% 35%
* Other portions of 15% bracket will remain as under current law.

21. PRESIDENTIALLY DECLARED DISASTERS
The act expands the IRS's authority to postpone tax deadlines due to presidentially declared disasters. Don't throw away your tax books, remember many of the tax provisions will "sunset" in 2011 unless Congress takes action to make the legislation permanent.