Hutchins Allen & Company, P.A. Certified Public Accountants 4720 N. Croatan Highway Kitty Hawk, NC 27949 (252) 261-1040 Kitty Hawk and Avon and www.obxcpa.com     News you can use………………                                                             July 10, 2008   Taxes & Business Items   The Internal Revenue Service has increased, effective July 1, 2008, the standard mileage deduction rate to $.585/mile, from $.505/mile, until December 31, 2008, for business usage of vehicles.   The Economic Stimulus Act of 2008 – most of the discussion and commentary this Spring was about the rebate checks for individual taxpayers which were created by this Act and are being mailed to taxpayers now.   More importantly, at least for businesses, are the two incentives, both concerning depreciation deductions. The Act increased the Sec. 179 expensing limitation for 2008 from $128,000 to $250,000 and the maximum placed-in-service amount from $510,000 to $800,000. Additionally the Act reintroduced Sec. 168 additional first-year (bonus) depreciation. This provision was originally introduced to the tax code after 9/11 to stimulate business investment. Sec. 168 allows an additional depreciation write off of 50% of the cost of equipment, etc. bought and placed in service in 2008.   Minimum wage – effective July 24, 2008 North Carolina minimum wage will increase to $6.55 per hour, from the current $6.15. For restaurants the tip credit amount allowed will be $4.42 and the cash wage will be $2.13. Please see our web site www.obxcpa.com for more information.   The annual Hutchins Allen economic surveys for Retail, Restaurant, and Property Management companies on the Outer Banks will be published shortly. There is still time for your 2007 economic statistics to be included in the survey and therefore qualify you to receive a customized benchmarking report for your business. Call Laurie at (252) 261-1040 to find out more!   2008 Planning……………..   Our understanding from talking with members of the local business community is that business, so far in 2008, is “soft”. Given the general prevailing national sentiment we expect the balance of the Summer season to continue soft, and we expect the Fall and Winter to be soft (at best).   Accordingly, we are advising businesses prepare for soft sales for the balance of 2008 and beginning, at least, of 2009. For all businesses this means carefully evaluating costs and expenses. For retail businesses we recommend establishing, now, a goal amount for year end inventories and developing a plan to “sell to that goal” for year end.   Please contact us if you have questions about any of the above items or would like to discuss how these items may affect your business.   Frederick Hutchins, CPA/PFS, MTX, CFP