IRS increases mileage rate to 55.5 cents per mile (June 23, 2011)
The Internal Revenue Service has increased the optional standard mileage rates for the final six months of 2011 (July-December 2011). The new business standard rate will be 55.5 cents per business mile (an increase of 4.5 cents). Medical/moving mileage increases to 23.5 cents per medical/moving mile. Charitable mileage rates remain the same at 14 cents per mile. Please see the table below for 2011 rates, or click here for official IRS documentation regarding the rate increase.
|
Purpose |
Rates 1/1 through 6/30/11
|
Rates 7/1 through 12/31/11
|
|
Business |
51 cents/mile |
55.5 cents/mile |
|
Medical/Moving |
19 cents/mile |
23.5 cents/mile |
|
Charitable |
14 cents/mile |
14 cents/mile |
Recently Married? (February 2, 2011)
If you just recently were married (or divorced) and are changing last names, you will have to fill out Form SS-5 and take it to your local Social Security Administration office. This is important to do right away, especially during tax time, because a mismatch between the name shown on your tax return and the SSA records can cause problems in the processing of your return and may even delay your refund. To find your local SSA office, please go to their website! For a few tips on how to change your name with the SSA, please click here!
Got kids? Here are some tax benefits for parents (January 26, 2011)
If you have children, there are a few tax benefits that parents can take advantage of come tax time. Children can be claimed as dependents, which means parents can take a $3,650 deduction (per child, $3,700 in 2011) off of their AGI. Parents can also take advantage of several credits, such as the Child Tax Credit ($1,000/child under 17, limited by income), Child and Dependent Care Credit, Higher Education Credits, and the Earned Income Tax Credit. For some other benefits parents should be considering, please click here!
How to Get Your Prior Year Tax Information from the IRS (January 19, 2011)
When changing tax preparers or applying for loans, you are likely to be asked to provide a copy of your most recent tax return. If you are unable to obtain this information from your records or prior accountant, your last option is the Internal Revenue Service. There are 3 options for obtaining free copies of your return from the IRS - via the web, by phone or by mail. For more information and instructions on the best course of action for you, please click here.
2011 Tax Benefits adjusted for inflation (December 23, 2010)
The Internal Revenue Service announced today the inflation adjustments for many tax benefits and tax brackets for 2011. Some of the key benefit changes are:
- Personal and dependent exemptions will be $3,700
- The standard deduction will be $5,800 for single filers and $11,600 for married-joint filers, and $8,500 for heads of household.
- Tax-bracket thresholds will increase for each filing status.
- Income limitation thresholds for a few credits (EITC and Lifetime Learning) will also increase.
Obama signs Tax Relief Act of 2010 into law (December 17, 2010)
On Friday, 12/17/10, President Obama signed into law the Tax Relief Act of 2010. A few highlights of the act include:
- Extension of Bush-era tax cuts for two years (2011 and 2012)
- Cut the employee's portion of SS Taxes by 2% for 2011 (From 6.2% down to 4.2% on the first $106,800 of wages)
- Extension of improvements to the Earned Income Tax Credit and Child Tax Credit
- Temporary cut on the Estate Tax rate for 2011 (From 55% down to 35% max)
- For businesses, 100% Bonus Depreciation on NEW property acquired after 9/8/10 and before 1/1/12
For a more in-depth outline by the Journal of Accountancy on the new act, please click here or here!
Standard Mileage Rates For 2011 (December 3, 2010)
On Friday, 12/3/10, the IRS announced standard mileage rates for 2011. These new rates, which go into effect beginning on January 1, 2011, can be used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes. More information on the new rates can be found here!
- 51 cents per business mile driven
- 19 cents per mile for medical or moving
- 14 cents per mile for services provided to charitable organizations
Small Business Jobs Act of 2010 (September 27, 2010)
On Monday, 9/27/10, President Barack Obama signed this bill into law. In short, this bill expands loan programs through the SBA (U.S. Small Business Administration), offers many different small business tax breaks, and changes the rules (in favor of the taxpayer) on a few tax laws (Section 179 expensing and Cell Phone treatment). The Journal of Accountancy has an expanded explanation on all of the changes found in this bill. To view their explanation of the Small Business Jobs Act of 2010 , please click here!
American Opportunity Tax Credit (IRS Tax Tip 2010-23, August 27, 2010)
If you have dependents in college, this credit may be for you. With the enactment of the American Recovery and Reinvestment Act of 2009, this credit was included to replace the existing Hope Credit. Most taxpayers with qualified tuition and related expenses for higher education in 2009 and 2010 are able to claim this credit on their tax return. For more on how this credit could decrease your tax liability , please click here!
Charitable Donations (IRS Tax Tip 2010-21, August 23, 2010)
Do you make donations to your favorite charity every year? No matter whether the donation is cash or non-cash, many things must be taken into consideration to determine whether you can take the deduction on your tax return. Did you contribute to a qualified organization? Do you have a receipt? Was the donation actually given or just pledged? The answers to these questions will affect whether you can take a deduction. For some tips and the answers to these questions, please click here!
Employee vs. Independent Contractor (IRS Tax Tip 2010-20, August 20, 2010)
Should the person you hired be getting Form W-2 or 1099? Do they fit the definition of an employee? Or are they an independent contrator? The IRS has issued some guidelines on how to determine the status of your worker, which will affect the taxes you pay and the documents you file. To gain a better understanding on the differences between the two, please click here!
Keeping good tax records (IRS Tax Tip 2010-18, August 16, 2010)
All taxpayers are required to maintain their records in the case of an audit. But what exactly should you keep? And how long should you keep it for? To answer these questions, there is no better source than the Internal Revenue Service. To find out what information you need to keep, please click here!
Paper Deposit Coupons (August 2010)
The IRS has proposed regulations that would remove the use of paper coupons for the payment of employer taxes, corporate income taxes, and many other taxes. Both the IRS and states have made a big push in recent years for all tax payments to be made electronically. These new regulations would get them a step closer to their ultimate goal. For more information on the discontinuation of paper coupons, please click here!
Offer in Compromise (July 2010)
Do you owe more in taxes to the IRS than you can afford to pay? If so, you may be able to take advantage of an Offer in Compromise. The IRS does not exactly advertise this option, but it's one method that may help you decrease some of your tax liability. To see if this may be helpful to you, please click here!
