In general, you must keep records that support items shown on your individual tax return until the statute of limitations runs out -- generally three years from the due date of the return, or the date you filed, whichever is later. In most cases, the IRS can audit your return for three years. You can also file an amended return on Form 1040X during this time period if you missed a deduction, overlooked a credit or misreported income.

The IRS says that a retiree who had been provided medical benefits by his prior employer owes FICA taxes on any cash payments received in lieu of continuing medical benefits. The payment is considered to be salary – and thus subject to payroll taxes because it relates to a benefit from a prior employment relationship.

The new rate for business miles is up 2 cents from 2007 however, medical and moving miles are down 1 cent from last year. The rate for miles driven in the service of a charitable organization has remained the same.

One should never send confidential information via email unless absolutely sure of whom the recipient is. The IRS never initiates contact with a taxpayer via email.

Some people think they are getting ahead of the game by mailing forms to the Government and at the same time providing the appropriate forms to their employee/independent contractor. The reality is, by doing so, they are potentially creating a difficult situation for themselves.

Smart Tax Tips: New Employee Tax Credit, Donate From Your IRA, Don't Forget Your 1099!