Posts Tagged "deductible"

New Standard Mileage Rates Now Available; Business Rate to Rise in 2015

Posted on Dec 10, 2014

The Internal Revenue Service today issued the 2015 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, 2015, the standard mileage rates for the use of a car, van, pickup or panel truck will be: 57.5 cents per mile for business miles driven, up from 56 cents in 2014 23 cents per mile driven for medical or moving purposes, down half a cent from 2014 14 cents per mile driven in service of charitable organizations The standard mileage rate for business is based on an annual study of the fixed and variable costs of operating an automobile, including depreciation, insurance, repairs, tires, maintenance, gas and oil. The rate for medical and moving purposes is based on the variable costs, such as gas and oil. The charitable rate is set by law. Taxpayers always have the option of claiming deductions based on the actual costs of using a vehicle rather than the standard mileage rates. A taxpayer may not use the business standard mileage rate for a vehicle after claiming accelerated depreciation, including the Section 179 expense deduction, on that vehicle. Likewise, the standard rate is not available to fleet owners (more than four vehicles used simultaneously). Details on these and other special rules are in Revenue Procedure 2010-51, the instructions to Form 1040 and various online IRS publications including Publication 17, Your Federal Income Tax. Besides the standard mileage rates, Notice 2014-79, posted today on IRS.gov, also includes the basis reduction amounts for those choosing the business standard mileage rate, as well as the maximum standard automobile cost   that may be used in computing an allowance under  a fixed and variable rate plan. Gilliland & Associates, PC is a full-service CPA firm specializing in tax planning for individuals and businesses in the Northern Virginia area. We are based in Falls Church, VA and also service clients in the McLean and Tysons Corner, VA. Gilliland & Associates specializes known for our superior knowledge and aggressive interpretation and application of tax laws, we help you keep more of your earnings by finding you the lowest possible tax on your business or personal tax return. You can connect with us on Google+, LinkedIn, Facebook, and...

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The AMT: Will this tax apply to you?

Posted on Feb 7, 2014

What’s your alternative minimum tax (AMT) preference? Though you might prefer to not think about the AMT, certain income and deductions, known as preference items, affect the way the tax will apply to you. Those amounts, along with others called “adjustments,” are added to or subtracted from the income shown on your tax return to arrive at your AMT taxable income. For example, certain bond interest that you exclude from your regular taxable income must be included when computing income for the AMT. This is a “preference item” because tax-exempt interest gets preferential treatment under ordinary federal income tax rules. Adjustments include personal exemptions and your standard deduction. In the AMT calculation, these taxable-income reducers are not deductible. Instead, they’re replaced with one flat exemption, which is generally the amount of income you can exclude from the AMT. Note: For your 2013 tax return, the AMT exemption is $80,800 when you’re married filing a joint return or are a surviving spouse, $51,900 when you file as single, and $40,400 if you’re married and file separately. The exemption decreases once your income reaches a certain level. What if you itemize? Some itemized deductions are allowed, such as charitable contributions. Others, including medical expenses and mortgage interest, are computed using less favorable rules. Whatever AMT preference – or adjustment – applies to you, we’re here to help calculate the best tax outcome. Please contact us for details or assistance. Gilliland & Associates, PC is a full-service CPA firm specializing in tax planning for individuals and businesses in the Northern Virginia area. We are based in Falls Church, VA and also service clients in the McLean and Tysons Corner, VA. Gilliland & Associates specializes known for our superior knowledge and aggressive interpretation and application of tax laws, we help you keep more of your earnings by finding you the lowest possible tax on your business or personal tax return. You can connect with us on Google+ <https://plus.google.com/108764776146415485651/posts> , LinkedIn <http://www.linkedin.com/in/gillilandcpa> , Facebook <https://www.facebook.com/gillilandcpa> , and Twitter...

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The clock’s ticking on 2013 tax-cutting

Posted on Nov 5, 2013

Want to lower your 2013 tax bill? The time for action is running out, so consider these tax-savers now. * You can choose to deduct sales taxes instead of local and state income taxes. If you’re planning big ticket purchases (like a car or a boat), buy before year-end to beef up your deductible amount of sales tax. * If you’re a teacher, don’t overlook the deduction for up to $250 for classroom supplies you purchase in 2013. * Consider prepaying college tuition you’ll owe for the first semester of 2014. This year you can deduct up to $4,000 for higher education expenses. Income limits apply. * Max out your retirement plan contributions. You can set aside $5,500 in an IRA ($6,500 if you’re 50 or older), $12,000 in a SIMPLE ($14,500 if you’re 50 or older), or $17,500 in a 401(k) plan ($23,000 if you’re 50 or older). * Establish a pension plan for your small business. You may qualify for a tax credit of up to $500 in each of the plan’s first three years. * Need equipment for your business? Buy and place it in service by year-end to qualify for up to $500,000 of first-year expensing or 50% bonus depreciation. * Review your investments and make your year-end sell decisions, whether to rebalance your portfolio at the lowest tax cost or to offset gains and losses. * If you’re charity-minded, consider giving appreciated stock that you’ve owned for over a year. You can generally deduct the fair market value and pay no capital gains tax on the appreciation. * Another charitable possibility for those over 70½: Make a direct donation of up to $100,000 from your IRA to a charity. The donation counts as part of your required minimum distribution but isn’t included in your taxable income. * Install energy-saving improvements (such as insulation, doors, and windows) in your home, and you might qualify for a tax credit of up to $500. These possibilities for cutting your taxes are just the starting point. Contact us now for a review of your 2013 tax situation and tax-saving suggestions that will work best in your individual circumstances. Gilliland & Associates, PC is a full-service CPA firm specializing in tax planning for individuals and businesses in the Northern Virginia area. We are based in Falls Church, VA and also service clients in the McLean and Tysons Corner, VA. Gilliland & Associates specializes known for our superior knowledge and aggressive interpretation and application of tax laws, we help you keep more of your earnings by finding you the lowest possible tax on your business or personal tax return. You can connect with us on Google+ , LinkedIn , Facebook , and...

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Consider making a charitable gift from your IRA

Posted on Sep 12, 2013

The tax law signed last January extended the tax break that allows contributions of up to $100,000 from a traditional IRA to a qualified charity. Taxpayers aged 70½ or older can make a distribution directly from an IRA to a charity. The amount donated is not included in the taxpayer’s gross income and is considered part of the required minimum distribution for the year. Gilliland & Associates, PC is a full-service CPA firm specializing in tax planning for individuals and businesses in the Northern Virginia area. We are based in Falls Church, VA and also service clients in the McLean and Tysons Corner, VA. Gilliland & Associates specializes known for our superior knowledge and aggressive interpretation and application of tax laws, we help you keep more of your earnings by finding you the lowest possible tax on your business or personal tax return. You can connect with us on Google+ , LinkedIn , Facebook, and Twitter....

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Make the most of your professional advisors

Posted on Jul 4, 2013

Who’s on your team? No, not your sports or reality-show dancing team, your business team, that group of professional advisors who are ready and willing to help you tackle tough financial decisions. Those decisions can have an effect on your taxes this year as well as in the future, so you want to be sure your advisors know each other – and are working together for your benefit. As you begin your midyear planning review, here are three areas where coordinating the advice you receive can pay off. * Investments. Capital gains and losses from sales of your securities affect your taxes, of course, but the kind of investments you make can also have an impact. For instance, buying municipal bonds to generate tax-free interest may result in the unintended outcome of creating income subject to the alternative minimum tax. * Insurance. The type of health insurance plan you select can have tax implications. An example: A Health Savings Account (HSA), used in conjunction with a high-deductible health plan, can save premium and tax dollars. You fund an HSA with pre-tax cash and take tax-free withdrawals to pay medical expenses. * Estate planning. Wills, trusts, and beneficiary designations provide the framework for carrying out your wishes after your death. Communication between your tax and legal advisors helps ensure that these documents offer the greatest protection for your heirs while minimizing estate tax consequences. Please call us to schedule a comprehensive review of your goals. We’re delighted to be part of your professional...

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