Itemized or Standard Deduction?

The IRS statistics show that most taxpayers use the standard deduction. However, you may be able to reduce your tax bill if you itemize on Schedule A. What expenses are deductible on Schedule A? I think most people are familiar with the typical itemized deductions, which requires a Schedule A to be filed. Home mortgage Read more about Itemized or Standard Deduction?[…]

2016 Automobile Mileage Rates

The IRS released the 2016 standard mileage rates for business, medical and moving in December. The rates have decreased from 2015, probably due to the decrease in the cost of gasoline.  Effective January 1, 2016, the standard mileage rates for the use of an automobile are as follows: 54 cents per mile for business miles Read more about 2016 Automobile Mileage Rates[…]

Tax Deductible Expenses

I’m often asked if a particular expense is tax deductible.  Everyone is looking for a deduction!  In general, only expenses incurred in a trade or business (IRC §162) or those incurred in the production of income (IRC §212), will be deductible on an individual tax return. I once had someone ask me if a new Read more about Tax Deductible Expenses[…]

Section 179 Expensing Election in 2014

This time of year, smart business owners begin their year-end tax planning.  During the last ten years, Congress has allowed a large Section 179 election for businesses. Under the provisions of Section 179, qualifying property placed in service during the tax year may be immediately expensed, rather than depreciated over its useful life.  In 2013, Read more about Section 179 Expensing Election in 2014[…]

Per Diem Rates for Fiscal Year 2015

The IRS has released the per diem rates taxpayers can use to reimburse employees for expenses incurred during travel after September 30, 2014. The low-cost area per diem increases from $170 to $172 and the high-cost area per diem increases from $251 to $259.  Important to note, only employees are able to use per diem Read more about Per Diem Rates for Fiscal Year 2015[…]

New Retirement Option?

In his state of the union address on January 29, 2014, President Obama instructed the Treasury Department to create the myRA retirement savings account.  These accounts will be available before 2015.  As an update, President Obama’s budget, released on March 4 requires these accounts to be offered this year.  More on President Obama’s budget tax Read more about New Retirement Option?[…]

Q&A: Dependency Exemptions

There are many questions that arise when claiming the dependency exemption.  While some dependents are clear cut, such as an 8 year old son or daughter living with both parents while they are married, others require more evaluation of the tax laws and regulations. Q:  What if my daughter graduated from college in May of Read more about Q&A: Dependency Exemptions[…]

Personal and Dependency Exemptions

Each individual taxpayer is entitled to a personal exemption, unless they are claimed as a dependent on another return. For example, my daughter Hannah is a student, age 22, and is claimed as a dependent on my tax return.  When she files her 1040, she is not able to claim a personal exemption, but she Read more about Personal and Dependency Exemptions[…]

2014 Standard Mileage Rates

Today, the IRS announced the standard mileage rates for 2014.  The standard rates are an optional method taxpayers may use to calculate the deductible costs of operating an auto for business, medical, charitable or moving purposes. Effective January 1, 2014, the standard mileage rates will be: 56 cents per mile for business miles (down from Read more about 2014 Standard Mileage Rates[…]