2016 Standard Mileage Rates for Business, Medical and Moving
The Internal Revenue Service issued the 2016 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, 2016, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be:
54 cents per mile for business miles driven, down from 57.5 cents for 2015
19 cents per mile driven for medical or moving purposes, down from 23 cents for 2015
14 cents per mile driven in service of charitable organizations
The business mileage rate decreased 3.5 cents per mile and the medical, and moving expense rates decrease 4 cents per mile from the 2015 rates. The charitable rate is based on statute.
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.
Taxpayers always have the option of calculating the actual costs of using their vehicle rather than using the standard mileage rates.
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 more than four vehicles used simultaneously.
This is for general information purposes only and should not be construed as tax advice. Contact our office for information specific to your tax situation. ... See MoreSee Less
Want to Lower your 2015 Tax Liability?
Here is 1 way: Make sure you have adequate health insurance coverage.
If you and your family don’t have adequate medical coverage or “minimum essential coverage”, you may be subject to a penalty on your 2015 income tax return. Medical insurance provided by your employer or through an individual plan purchased through a state insurance marketplace generally qualifies for adequate coverage. The penalty amount varies based on 1. The number of uninsured members of your household and 2. Your household income. If you have three or more uninsured household members, the penalty could be $975 or more for 2015, depending on the household income.
This is for general information purposes only. It is not intended to be interpreted as tax advice. Contact our office for information specific to your tax situation. ... See MoreSee Less
Tips on Travel While Giving Your Services to Charity
Do you plan to donate your services to charity this summer? Will you travel as part of the service? If so, some travel expenses may help lower your taxes when you file your tax return next year. Here are several tax tips that you should know if you travel while giving your services to charity.
• Qualified Charities. In order to deduct your costs, your volunteer work must be for a qualified charity. Most groups must apply to the IRS to become qualified. Churches and governments are qualified, and do not need to apply to the IRS. Ask the group about its IRS status before you donate.
• Out-of-Pocket Expenses. You may be able to deduct some costs you pay to give your services. This can include the cost of travel. The costs must be necessary while you are away from home giving your services for a qualified charity. All costs must be:
2. Directly connected with the services,
3. Expenses you had only because of the services you gave, and
4. Not personal, living or family expenses.
• Genuine and Substantial Duty. Your charity work has to be real and substantial throughout the trip. You can’t deduct expenses if you only have nominal duties or do not have any duties for significant parts of the trip.
• Value of Time or Service. You can’t deduct the value of your services that you give to charity. This includes income lost while you work as an unpaid volunteer for a qualified charity.
• Deductible travel. The types of expenses that you may be able to deduct include: 1. Air, rail and bus transportation, 2. Car expenses,
3. Lodging costs, 4. The cost of meals, and 5. Taxi or other transportation costs between the airport or station and your hotel.
• Nondeductible Travel. Some types of travel do not qualify for a tax deduction. For example, you can’t deduct your costs if a significant part of the trip involves recreation or a vacation.
This is for general information purposes only. It is not intended to be interpreted as tax advice. ... See MoreSee Less
Tax Tips for Starting a Business
When you start a business, a key to your success is to know your tax obligations. You may not only need to know about income tax rules, but also about payroll tax rules. Here are five tax tips that can help you get your business off to a good start.
1. Business Structure. An early choice you need to make is to decide on the type of structure for your business. The most common types are sole proprietor, partnership and corporation. The type of business you choose will determine which tax forms you will file.
2. Business Taxes. There are four general types of business taxes. They are income tax, self-employment tax, employment tax and excise tax. In most cases, the types of tax your business pays depends on the type of business structure you set up. You may need to make estimated tax payments.
3. Employer Identification Number. You need to get an EIN for federal tax purposes.
4. Accounting Method. An accounting method is a set of rules that you use to determine when to report income and expenses. You must use a consistent method. The two that are most common are the cash and accrual methods. Under the cash method, you normally report income and deduct expenses in the year that you receive or pay them. Under the accrual method, you generally report income and deduct expenses in the year that you earn or incur them. This is true even if you get the income or pay the expense in a later year.
5. Employee Health Care. The Small Business Health Care Tax Credit helps small businesses and tax-exempt organizations pay for health care coverage they offer their employees. A small employer is eligible for the credit if it has fewer than 25 employees who work full-time, or a combination of full-time and part-time. The maximum credit is 50 percent of premiums paid for small business employers and 35 percent of premiums paid for small tax-exempt employers, such as charities.
This is for general information purposes only. Contact our office for information specific to your tax situation. ... See MoreSee Less