Category Archives: Business Travel & Deductions

Hey Boomers – want to know where is the best place to live in retirement?

Want to know where is the best place to live in retirement? Use this map.Want to know where is the best place to live in retirement?

Use This Interactive Map on State-by-State Guide to Taxes on Retirees

Is *retirement* in your life plan?  Want to know where is the best place to live in retirement?  Visit Kiplinger  and click on any state in the map for a detailed summary of taxes on retirement income property and purchases, as well as special tax breaks for seniors.

Go over to Kiplinger for more maps including the most tax-friendly and least tax-friendly states for retirees. Read more at http://www.kiplinger.com/tool/retirement

SOURCES: State tax departments, CCH and the Tax Foundation.

New Standard Mileage Rates Now Available; Just Announced

OdometerNew Standard Mileage Rates Just Announced by IRS ; Business Rate to Rise in 2015

WASHINGTON — 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.

Notice 2014-79 provides the optional standard mileage rates for substantiating the amount of deductible expenses for using an automobile for business, moving, medical, or charitable purposes.  For 2015, the standard mileage rates are 57.5 cents for business use of an automobile, 14 cents for use of an automobile as a charitable contribution, and 23 cents for use of an automobile as a medical or moving expense.

Notice 2014-79 also provides the amount a taxpayer must use in calculating reductions to basis for depreciation taken under the business standard mileage rate and the maximum standard automobile cost that a taxpayer may use in computing the allowance under a fixed and variable rate plan.

The rules for using the optional standard mileage rates to calculate the amount of a deductible business, moving, medical, or charitable expense are in Rev. Proc. 2010-51.

Notice 2014-79 will be in IRB IRB 2014-53, dated December 29, 2014.

Planning To Form An LLC or Corporation? Wait!

Yellow CAUTION signEntity creation has a cost!

If you are thinking of forming an LLC or corporation PLEASE call me before you do anything.  Over 90% of the entities we see are dissolved within the first 4 years of existence.  When creating an entity you will incur ongoing  addition business expenses that may not be necessary.  You can reach me at 619-589-8680.

IRS Announces Special Per Diem Rates Effective October1, 2014

Box of ReceiptsSpecial per diem rates for lodging, meals, and incidental expenses.

Notice 2014-57 announces the special per diem rates effective October 1, 2014, which taxpayers may use to substantiate the amount of expenses for lodging, meals, and incidental expenses when traveling away from home.  The rates are the special transportation industry rate, the rate for the incidental expenses only deduction, and the rates and list of high-cost localities for purposes of the high-low substantiation method.  Use of a per diem substantiation method is not mandatory.  A taxpayer may substantiate actual allowable expenses if the taxpayer maintains adequate records or other sufficient evidence for proper substantiation.

Notice 2014-57 will be published in Internal Revenue Bulletin 2014-41 on Oct. 6, 2014.

Source:  IRS Guidewire Issue Number:    N-2014-57

 

How to Deduct Expenses at the NAFCC Conference in Orlando, Florida

January 29 Header for ChildCare Site

 

Follow IRS rules about business travel and deductions and enjoy the trip!

Are you planning to attend the National Association for Family Child Care Conference in Orlando, Florida on July 11-12, 2014?  The program guide  gives you all the details about workshops and seminars that will be taking place, including valuable business practices for record keeping and general business administration of your child care business.

WHAT’S EVEN BETTER – YOU HAVE DEDUCTIONS!

Want to read more?  Click Here

IRS Red Flag Scenarios

CAUTION Audit Alert SignTAXPAYER CLAIMS HE IS A WRITER…

A taxpayer was unable to prove his business deduction as a legitimate expense.  In 2006-2007 the taxpayer claimed his trips abroad were to take photographs for a book on world travel.  He deducted $20,000 for costs associated with his travels to Africa, Australia, Asia and South America.  He claimed he was a writer, but in 2011 he still had failed to publish anything – and the book was still in rough form.  It was decided that even though he had a business plan, and a profit motive, he failed to produce evidence that he was in a trade or business of being an author.  (¹Oros v. Comm. (December 31, 2013) US Court of Appeals for the Ninth District, Case No. 12-71071)

MBA TUITION DEDUCTION DENIED

Husband and wife were denied a major deduction of $17,138 for the husband’s MBA tuition expenses.  Why?  Because they could not provide evidence that the schooling was required for his employment.  Education expenses may be deducted if the education:

  1. Maintains or improves skills required by the individual’s employment; or
  2. It meets the requirements of the individual’s employer or the law, as a condition of employment.

 

Source of content : Spidell’s Elder Client Care Planner , March 2014

 

 

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