Mileage Rates Changed beginning July 1 2011

Posted by Bruce Mc on Jul 10, 2011 in Bookeeping, News Flash, Tax Planning | 0 comments

The IRS standard mileage rate for the final six months of 2011 was increased as a result of the recent increase in gasoline prices. The IRS usually only adjusts this rate annually in the fall.

This is the second time in the past 3 years however that they have done this.

The standard mileage rate was increased by 4.5 cents for business, medical and moving travel for the last six months of 2011. Charitable travel remained unchanged at 14 cents per mile as this rate is set by statue, not the IRS.

The standard mileage rate is used to compute the deductible costs of operating an automobile for business use in lieu of tracking actual costs. This rate is also used as a benchmark by the federal government and many businesses to reimburse their employees for mileage.

Taxpayers always have the option of calculating the actual costs of using their vehicle rather than using the standard mileage rates.

Mileage Rates for July 1, 2011 to December 31, 2011 are:

• Business: 55.5 cents per mile (Compared to first six months at 51 cents per mile).
• Medical: 23.5 cents per mile (Compared to first six months of 2011 at 19 cents per mile).
• Moving: 23.5 cents per mile (Compared to first six months of 2011 at 19 cents per mile).
• Charitable: Unchanged at 14 cents per mile.

IRS Announces 2010 Standard Mileage Rates

Posted by Bruce Mc on Dec 3, 2009 in Information, Tax Preparation | 0 comments

          The Internal Revenue Service today issued the 2010 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, 2010, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be:

• 50 cents per mile for business miles driven
• 16.5 cents per mile driven for medical or moving purposes
• 14 cents per mile driven in service of charitable organizations – They really need to adjust this.

         The new rates for business, medical and moving purposes are slightly lower than last year’s. The mileage rates for 2010 reflect generally lower transportation costs compared to a year ago.

        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 as determined by the same study. Independent contractor Runzheimer International conducted the study.

         A taxpayer may not use the business standard mileage rate for a vehicle after using any depreciation method under the Modified Accelerated Cost Recovery System (MACRS) or after claiming a Section 179 deduction for that vehicle. In addition, the business standard mileage rate cannot be used for any vehicle used for hire or for more than four vehicles used simultaneously.

        Taxpayers always have the option of calculating the actual costs of using their vehicle rather than using the standard mileage rates.

Revenue Procedure 2009-54 contains additional details regarding the standard mileage rates.

The above is a direct copy and paste from the IRS Newswire.

Week ending . . .

Posted by Bruce Mc on Jan 25, 2009 in News Flash, Opinions, Week in review | 0 comments

            Wow! What a week this has been. Not just in my world but around the world. As much as I’d like to talk about what is going on “everywhere”, I think I had better just stick with the taxing world and the world of taxguy.

            Nine days ago I transmitted the first e-file return. Following that transmitted return, I started to complete a few other returns as the official start of tax season began.  (Are you ready?) With it being officially the filing season, I thought I’d throw some info out there for you to help you get going.

             We have a new president and he is off and running. The neatest thing so far that I have noticed, is President Obama created WhiteHouse.gov. “WhiteHouse.gov will be a central part of
President Obama’s pledge to make his the most transparent and accountable
administration in American history.” If you want to follow along with what is happening this is a very interesting site, along with a blog. Follow our government in a new and unique way.

            Understandably, it is a work in progress but the information it is making available so far is really interesting. You’re able to find out about the Agenda of the new administration as well as read short bio’s on them. History of the White House, and other great informational places. I haven’t searched it all, but what I have read and seen, I think this is really interesting.

            Second chance for economic stimulus check is a great informational tip from Bankrate.com. Every weekday until the end of tax season, Bankrate.com will be providing these tips. I strongly recommend to everyone to check these out.

I was lucky enough to take part in Second chance for economic stimulus check. Myself with fellow tax blogger Robert The Wondering Tax Pro have been included in the observations and insights of this article wonderfully written by Kay Bell. Thank you Kay for allowing me to provide my input.

Along those lines, I was also given the honor to join the ranks of tax professionals who were able to “vent” about a few client aggravations. As Kay Bell writes in her post Are you a good or bad tax client?, “. . . the truth is if you and I were better clients, we’d not only make our tax advisors’ jobs easier, we’d likely end up with a better tax result. That adage “garbage in, garbage out” applies here; even the best tax professional can only work with what he or she gets from the taxpayer.” The post is great, from a prepares point of view.

Finally, while I seem to be focusing on the writings of Kay Bell, the author of Don’t Mess With Taxes, Kay as also written a book that is now available. The Truth About Paying Fewer Taxes was released last week. I haven’t received my copy as of yet (UPS tracking says I’ll have it Tuesday).

February, I will be posting a book review of The Truth About Paying Fewer Taxes, and I will be having my first giving away, a signed copy by its author. So you’ll need to stay tuned for more information.

Okay, what else has been going on around the blog-o-sphere?

Grocery Store Mind Games form Wide Open Wallet is a real eye opener. “. . . according to studies as much as 60 to 70 percent of all purchases at the grocery store are unplanned.”

The Contest at Pecuniarities ended last night. Still waiting to hear who won. Also from Pecuniarities, Carnival of Personal Finance No. 188: The Jane Austen Edition has some great reading. You have to click the links.

File Your Income Taxes Online for Free is a post from No Debt Plan. The IRS has a list of all the places that offer e-file, most of which you have to click the link from within the IRS website. OF them all which is best? Well neither I or anyone else can answer for you without knowing your situation, but “. . .there is a pretty simple weeding out process you can do. Check the websites of the companies listed.”

This week Living Almost large reviews the book Coming Up Short – The challenge of the 401k plans. It’s a book talking about the challenges facing 401ks and what has happened since their inception in 1981. I love the history. But this isn’t just about the history. Read the review, get the book.

Guesstimating take-home pay from a job is a great bit of info for those trying to figure out their take home pay.

There are two post of interest at A Personal Finance Guide. “Becoming smart about money and thriving requires more than a basic financial plan. Knowing how much you need to put away for retirement or college is all very well but to achieve your goals and dreams you need a lot more than mere time-value-of-money calculations. There are many more aspects to being successful. . .” They are discussed in part here. Money and Success – Become Smart About Money and Thrive in Three Basic Steps. And Learning to Save Money Isn’t As Hard As You May Think, it may be a “. . . challenge at first, but the more you do it the easier it gets.”

Filing your taxes: D-I-Y Taxation Software or a Professional Preparer is a great post from Andy. (Even though I thought a small bit of info was miss-communicated.)

The Certified Financial Planner Board of Standards recently provided ten tips on selecting a financial planner as reported and linked to at Tick Marks in the post Planning to Choose a Financial Planner–10 Questions to Consider.

KEEPING TRACK OF BUSINESS MILEAGE and BRIDE OF KEEPING TRACK OF BUSINESS MILEAGE are both great pieces on keeping track of well, yes, your business milage from The Wondering Tax Pro.

Peter over at The Tax Lawyer’s Blog has a real look at on a few things in his post Repeal the Corporate Income Tax and Bring Those Jobs Back Home.

Kelly from Taxgirl reports Google ate Feedburner.

California Tax Refunds Delayed as reported by Russ Fox at Taxable Talk. Have you considered what you would do if this happened in your state?

Being from Oklahoma I always find interesting some of the things I hear from down there. The Tax Foundation Oklahoma’s Budget is ######## is just more interesting info from there.

Joe Kristan from Roth & Company, P.C. Tax Update Blog, reports Ways and Means passes stimulus bill, but weakens 5-year NOL carryback. Hummm.

He also looks at IRS guidance on reporting K-1 percentages.

Next post scheduled for 02/01/2009

Tracking Car expenses. . .

Posted by Bruce Mc on Nov 21, 2008 in Form 1040 Information, Re post | 2 comments

            Well, technically, any gas, parking, tolls that are under $75.00, you don’t need a receipt to back up each claim. Meaning if you claim $140.00 in gas and you filled up four times you won’t need the receipts to back that up in an audit. Personally I just find it easier to keep all my receipts so that I have an easy way to get my totals.

            Mileage should be tracked on a daily basis – the same way you record in your calendar where you went, who you went to see and why. In fact you could easily do this all in one step. When you write down where, who, and why, also write down the mileage. On your tax return when you claim a deduction for auto expense there are two questions that being able to check “yes” to, is of major importance for a well prepared return:

1.      Do you have evidence to support business use?

2.      Is the evidence written?

In all seriousness the whole process might take you 5 minutes a day to properly document everything that might be necessary. Get a small planner, when you get in your car write down the mileage, where you are going, why, (personal or business), and who you met. When you get there real quick write down your mileage again.

There are a great number of spread sheets out there on the net that you can find and use. Or take the above information and create your own with the information that best fits your situation. For those of you into techy gadgets, there are a lot of those out there that will do the job (and then some).

I use a spread sheet of my own design that I re-enter into a running spread sheet using excel. In it I track where I go, start and end mileage, who I visited (if I went to see a client), and why I went there.

In earlier years as a preparer I never really understood the “why” part until during an audit I saw several normally acceptable expenses refused by the IRS because the taxpayer went someplace that might have been for “personal reason” Meaning if you go to Target to buy a new whatever for the office, in your journal or whatever you track your car expenses with make sure and write that down. Just going to Target might mean you went to get gum, and that more than likely wouldn’t count as a deduction.

Need more info? You can check out the IRS page for Publication 463, ask me or contact your tax preparer.

The more information you have the better you are if an audit comes your way.

This is a re-post from 08/27/08