The outlook for the restaurant industry grew more optimistic in recent months, as the National Restaurant Association’s comprehensive index of restaurant activity registered its fourth consecutive monthly gain in April.

The Association’s Restaurant Performance Index (RPI) — a monthly composite index that tracks the health of and outlook for the U anchor.S. restaurant industry — stood at 98.6 in April, up 0.8 percent from March, its highest level in 11 months.

Now consumers are cutting back, and dining out is among the casualties. Finer restaurant chains have been hit hard, and so have the casual sit-down places that flooded suburban shopping centers and tourist districts across the country, aimed straight at middle American tastes.

A few chains have boarded up already. Many others are going into survival mode, trying to renegotiate their loans, cutting staff, offering bargains to customers and closing less profitable restaurants. Analysts predict thousands more restaurants could close in the next year or two.

“For those thinking about buying a new car this year, this deduction may give them a little more drive to make their purchase this year,” said IRS Commissioner Doug Shulman.

The deduction is limited to the state and local sales and excise taxes paid on up to $49,500 of the purchase price of a qualified new car, light truck, motor home or motorcycle.  A 5% state sales tax would earn you a maximum of deduction of $2475.

IRS also alerted taxpayers that the vehicle must be purchased after Feb. 16, 2009, and before Jan. 1, 2010, to qualify for the deduction.

Seven states are reporting unemployment rates over 10%:  Michigan (12%), South Carolina (11%), Oregon (10.8%), North Carolina (10.7%), California and Rhode Island (10.5% each), and Nevada (10.1%).

Unemployment increased by at least one percentage point in every single state and the District of Columbia.

In the last year, South Carolina has lost 88,700 jobs, the S.C. Employment Security Commission reported. The biggest losses have been seen in construction, -10,400, a 9% decline; manufacturing, -23,500, down 9.5%; trade, transportation and utilities, -19,000, down 5.1%; and professional and business services, -16,200, down 7.3%.

If AIG execs won’t return their $450 million in bonuses, lawmakers threatened Tuesday to pass a special new law taxing the payouts at anywhere from 60% to 100%.

“To those of you getting these bonuses: be forewarned, you will not be getting to keep them.”

Schumer called it “Alice in Wonderland business practices” to give bonuses to executives at a firm that lost nearly $100 billion last year and had to be rescued with $170 billion in taxpayer money.

Currently The IRS takes 35% of bonuses over $1 million.

The tax cuts are part of a $787 billion economic recovery plan passed by the Democratic-controlled Congress over Republican opposition. The aim is to put more money in the pockets of Americans and stimulate the economy by increasing consumer spending.

“I’m pleased to announce that this morning the Treasury Department began directing employers to reduce the amount of taxes withheld from paychecks, meaning that by April 1st, a typical family will begin taking home at least $65 more every month,” Obama said in his weekly radio address.

As soon as the IRS releases new tax tables, an update will be available for the PayMaster Program.

The American Payroll Association is recommending that to get this credit in the hands of American workers quickly and effectively, they recommend modifying the current income tax and withholding tables.

The current proposal involves a refundable income tax credit equal to 6.2% of the first $8,100 in wages subject to Federal Income Tax (FIT), resulting in a maximum credit of $502.20.

The APA suggests:

“Modify the current income tax and withholding tables to reflect a carve-out of $8,100 of
the 10% wage bracket, to be taxed at 3.8% (10% less 6.2%), and to reflect any additional tax
necessary in the higher wage brackets for anyone for whom the credit is not intended (i.e.,
phase-out for those earning more than a threshold amount of wages).”

“Require employers to apply the new withholding tables ‘as soon as administratively
practical,’ with a specific target date six to ten weeks after enactment. This will allow
employers who are able to immediately apply the change to do so, and it will recognize that
some systems are set up to make these sorts of changes at the first of a month or a quarter.”

“Stipulate that no employee’s FIT withholding for the year may be less than zero. An
employer may try to front the entire credit to some employees (!), but IRS and SSA systems
are not set up to accept negative numbers on Form W-2 and most fields of Form 941
(Employer’s Quarterly Federal Tax Return), and employer systems are accordingly
programmed not to allow such numbers.”

The APA and PayMaster believe that this would be the that this would be the most effective way to get this tax credit in the hands of the masses and reduce the burden on payroll professionals. The other reccomendations being suggested by the administration would require more complex programming, would increase the bookkeeping burden, and different taxpayers would have different experiences in receiving the credit.

WASHINGTON — The Internal Revenue Service today kicked off the 2009 tax filing season by announcing a number of new steps to help financially distressed taxpayers maximize their refunds and speed payments while providing additional help to people struggling to meet their tax obligations.

With many people facing additional financial difficulties, the IRS is taking several additional steps to help people who owe back taxes.

“We need to ensure that we balance our responsibility to enforce the law with the economic realities facing many American citizens today,” Shulman said. “We want to go the extra mile to help taxpayers, especially those who’ve done the right thing in the past and are facing unusual hardships.”

On a wide range of situations, IRS employees have flexibility to work with struggling taxpayers to assist them with their situation. Depending on the circumstances, taxpayers in hardship situations may be able to adjust payments for back taxes, avoid defaulting on payment agreements or possibly defer collection action.

The IRS reminds taxpayers who are behind on tax payments and need assistance to contact the phone numbers listed on their IRS correspondence. There could be additional help available for these taxpayers facing unusual hardship situations.

Areas where the IRS can provide assistance:

• Postponement of Collection Actions: IRS employees will have greater authority to suspend collection actions in certain hardship cases where taxpayers are unable to pay.
• Added Flexibility for Missed Payments: The IRS is allowing more flexibility for previously compliant individuals in existing Installment Agreements who have difficulty making payments because of a job loss or other financial hardship.
• Additional Review for Offers in Compromise on Home Values: An Offer in Compromise (OIC), an agreement between a taxpayer and the IRS that settles the taxpayer’s tax debt for less than the full amount owed, may be a viable option for taxpayers experiencing economic difficulties.
• Expedited Levy Releases: The IRS will speed the delivery of levy releases by easing requirements on taxpayers who request expedited levy releases for hardship reasons.

See the Press Release for complete details.

NEW YORK (CNNMoney.com) — For many cash-strapped workers, Barack Obama’s plan to stimulate the economy could mean more take-home money in their paychecks.

While details remain unclear, the president-elect’s recovery proposal is likely to include a tax cut to boost spending. Exactly how much of a break that could mean for workers depends on how the tax cut is structured.

But the proposal most likely to get money into the hands of the greatest number of taxpayers quickly is some form of Obama’s proposed Make Work Pay Credit.

The credit would essentially work as a payroll tax credit equal to $500 a year for individuals and $1,000 for couples. And the money could be delivered fairly quickly simply by having employers reduce the tax withholding in a person’s paycheck.

As disposable incomes shrink and savings plummet, residents across the region say there are still some luxuries they won’t let go of, no matter how bad it gets. They might be clipping coupons, joining warehouse clubs and carpooling, but they’re still willing to spend their hard-earned cash on one non-negotiable something — be it gourmet hot chocolate, cigars, pricey bottled water or a ski trip out West — that soothes the spirit. In about 75 interviews, residents said the prospect of money spent on friends, family or for a small boost to their well-being is worth it.