The Internal Revenue Service has recently issued the 2017 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes.
Beginning on Jan. 1, 2017, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be:
- 53.5 cents per mile for business miles driven, down from 54 cents for 2016
- 17 cents per mile driven for medical or moving purposes, down from 19 cents for 2016
- 14 cents per mile driven in service of charitable organizations
The business mileage rate decreased half a cent per mile and the medical and moving expense rates each dropped 2 cents per mile from 2016.
The charitable rate is set by statute and remains unchanged.
The standard mileage rate for business is based on an annual study of the fixed and variable costs of operating an automobile. The rate for medical and moving purposes is based on the variable costs.
Taxpayers always have the option of calculating the actual costs of using their vehicle Continue reading
You Do Not Want To Be In This Position
As tax season approaches, the Internal Revenue Service, in IR-2016-164, has just reminded taxpayers to be on the lookout for an array of evolving tax scams related to identity theft and refund fraud.
Every tax season, there is an increase in schemes that target innocent taxpayers by email, by phone and on-line. Taxpayers and tax professionals can not be too careful and should be on the lookout for these deceptive schemes.
“Whether it’s during the holidays or the approach of tax season, scam artists look for ways to use tax agencies and the tax industry to trick and confuse people,” said IRS Commissioner John Koskinen. “There are warning signs to these scams people should watch out for, and simple steps to avoid being duped into giving these criminals money, sensitive financial information or access to computers.”
Here are Seven of the Most Prevalent IRS Impersonation Scams:
Posted in identity theft, Income Taxes, IRS, IRS collections, IRS Notices, iRS Procedures, IRS tax scams, tax scams, Taxes
Tagged income tax, tax law, tax scams, Taxes, Tips To Prevent Being Tax Scammed
The Internal Revenue Service announced on December 1, 2016 (IR-2016-155) the launch of an online application that will assist taxpayers with straightforward balance inquiries in a safe, easy and convenient way.
This new and secure tool, available on IRS.gov allows taxpayers to view their IRS account balance, which will include the amount they owe for tax, penalties and interest.
It also should be pointed out that taxpayers may also continue to take advantage of the Continue reading
The Internal Revenue Service on December 18, 2015 issued the 2016 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes.
Beginning on Jan. 1, 2016, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be:
• 54 cents per mile for business miles driven, down from 57.5 cents for 2015
• 19 cents per mile driven for medical or moving purposes, down from 23 cents for 2015 Continue reading
Here is a neat info-graphic on the tax positions of the Presidential Candidates. Special thanks to MBACentral.org
On Friday, July 31, 2015, President Barack Obama signed HR 3236, the “Surface Transportation and Veterans Health Care Choice Improvement Act of 2015” (the “Act”). Not sure how this name relates to taxes but in any event the following tax law changes and provisions became law under this Act:
- Changes to the due dates for various returns. The Act sets new due dates for partnership returns, C corporation returns.
- Foreign Bank Account Reporting: New due dates for the important and often overlooked foreign bank account reporting (FBAR) forms, known as FinCEN Form 114, Report of Foreign Bank and Financial Accounts have been implemented.
- Changing the six year statute of limitations to apply to understatements of income that resulted from taxpayers overstating tax basis when calculating sales. This change overturns the Home Concrete case where the Supreme Court ruled that understatements of income as a result of basis miscalculations would not trigger the extended six-year statute of limitations applicable to understatements of income.
- Requiring consistent basis reporting for estates and estate beneficiaries.
- Requiring additional information to be included in mortgage information statements.
- Other Information Returns: The new act imposes new filing requirements for several other IRS information returns.
Posted in Basis, Basis Reporting For Estates and Beneficiaries, C Corporation Tax Returns, Estate Administration, Estate Planning, FBAR, Hidden Bank Accounts, Home Concrete Supreme Court Case, HR 3236, Partnership tax returns, Six Year Statute of Limitations, Surface Transportation and Veterans Health Care Choice Improvement Act of 2015, Taxes
Tagged Basis Reporting, C Corporation Reporting Due Dates, FBAR, FIN Cen Form 114, income tax, information returns, Mortgage Information Returns, Partnership Reporting Due Dates, Statute of Limitations, tax law, Taxes
Business Year-End Tax Planning
The arrival of year-end presents special opportunities for most small businesses to take steps in lowering their tax liability. The starting point is to run projections to determine the income and tax bracket for this year and what it may be next year. Once this is known, decisions can be made as to whether any of the following planning tools should be employed to cut taxes before the tax year closes.
Last second tax law changes also must be considered. It is also important to know that on December 19, 2014, the President passed the Tax Increase Prevention Act that extended many expired tax provisions some of which are discussed in more detail below. Note that these tax breaks are only available through the end of 2014. If any of these tax breaks are available to you, it would be prudent to take advantage of them before they expire.
Also keep in mind ordinary income tax rates for individuals can be as high as 35% to 39.6% so members of flow through entities such as partnerships, limited liability companies (LLCs) and S Corporations need to recognize this and other tax changes and plan accordingly.
The following presents some year-end tax strategies that may prove helpful to businesses of all shapes and sizes:
1. Accelerating or Deferring Income and Deductions as Part of a Year-end Tax Strategy
A good part of year-end tax planning involves techniques to accelerate or postpone income or deductions, as your tax situation dictates. The idea is to keep income even from year to year. Having spikes in taxable income in any one tax year puts you in a higher average tax bracket than you would be in if you had evened out the amount of taxable income between current and later year(s). (Historical note: For those of you old enough to remember, there was an income averaging rule built into the tax code that actually corrected for the inequity that can result in big shifts in income from year to year. That provision has long been abolished.)
So every year, businesses can take advantage of the traditional planning technique that involves alternatively deferring income or accelerating deductions. For example, business taxpayers such as pass-through entities (limited liability companies, partnerships, S corporations, sole proprietorship) should consider accelerating business income into the current year and deferring deductions until 2015 (and perhaps beyond) if they expect income to rise next year. Continue reading
Posted in Bonus Depreciation, Business, Business Planning, Corporations, income tax planning, Income Taxes, IRS, Repair Regulations, Retirement Plan Drafting, Section 179, Small Business, Start Up Expenses, Taxes, Year End Tax Planning, Year-End Business Tax Planning
Tagged Business, corporate tax planning, income tax, income tax deductions, income tax deferral, Small Business, Small Business Year-End Tax Planning, tax law, tax strategies, Taxes