Posts Tagged "tax deduction"

Driving for charity

Posted on Sep 19, 2014

If you drive your car on behalf of a charitable organization and there is no element of personal pleasure, recreation, or vacation involved, you may take a tax deduction for either your actual vehicle expenses or the standard mileage rate of 14 cents a mile, plus parking fees and tolls. 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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Business Tax Tip

Posted on Aug 10, 2012

Summer is a good time to do business entertaining – an outdoor barbecue at your home for business clients, for example. Keep records of the cost, the date, the attendees, and the business purpose. Your tax deduction is limited to 50% of the...

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What you need to know about interest deductions

Posted on Mar 22, 2011

Where does your interest lie? If interest you pay during the year rests in a tax-deductible category – or sprawls across several of them – you may be able to reduce your tax bill. Interest expense can be sorted into five groups, each subject to different rules and restrictions. 1. Business interest. Interest paid on borrowed funds used for your business can offset business income. In some cases, the deduction may be less than the total amount you paid, such as when you use loan proceeds to buy a vehicle you drive both personally and for business. 2. Investment interest. The deduction for interest on loans you take out to purchase investment property is limited to “net investment income.” That’s the amount you earn from interest, dividends, and other investments, less costs incurred to produce the income. 3. Passive activity interest. When your participation in a business venture is limited, or if you own rental property, the amount you can deduct as interest expense may be subject to the passive activity rules. These rules restrict your current-year deduction to income from passive activities. Nondeductible amounts can be carried forward to future years. 4. Qualified residence interest. This category includes interest on debt secured by your main home and/or a second home. Mortgage interest is an itemized deduction and includes prepayment penalties, late payment charges, and prepaid interest. 5. Personal interest. Personal interest generally offers no tax benefit. An exception: interest paid on student loans, which can be deducted even if you don’t itemize. The maximum amount of student loan interest you can deduct each year is $2,500. Please contact us to discuss the tax implications before you borrow...

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Home offices – when can you take a deduction?

Posted on Mar 15, 2011

If you work at home, you’d probably like to take a tax deduction for your home office. Here’s an overview of what qualifies. The first requirement is that you have a part of your home that you use regularly and exclusively for business purposes. It doesn’t have to be a separate room, but it must be a clearly defined area. The exclusive use is very important. The area must be reserved only for business use; if you also use it for personal activities, it won’t qualify. The only exceptions are if you store business samples or inventory at home, or if you run a home daycare business. The other requirement is that your home office be any one of the following: * Your principal place of business. That’s the place where you conduct most of the management and administrative activities of running your business. You may travel to meet customers, or perform operations in a hospital, but your principal place of business is where you do most of the work of actually managing your business. * A place where you regularly meet customers, clients, or patients. Even if you run the business from elsewhere, a home office can qualify if you regularly use it for meeting with customers, clients, or patients. * A separate building, not connected to your home. A freestanding garage or studio will qualify if it is used in your business. If you have an area of your home that qualifies, you can generally deduct a percentage of your total costs, including mortgage interest, insurance, taxes, and utilities. The percentage is calculated as the area used for business divided by your home’s total area. The rules on home offices are complex, with many gray areas. Contact our office if you need more information or...

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