2011 Standard Mileage Rates
December 13, 2010 | 
Subscribe to our RSS Feed
The IRS recently announced standard mileage rates beginning January 1, 2011. The rates apply to cars, vans, pickups or panel trucks.
- 51 cents per mile for business miles driven
- 19 cents per mile driven for medical or moving purposes
- 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. 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.
Taxpayers always have the option of calculating the actual costs of using their vehicle rather than using the standard mileage rates.
Questions?
Summary of Dec. 6 Tax Cuts Compromise
December 7, 2010 | Subscribe to our RSS Feed
President Obama and Republican leaders reached a compromise on December 6th regarding expiring tax cuts. Here are some highlights that might be relevant to you.
- The Bush-era tax cuts have been extended for two years. This includes an extension of the current 15% rate on capital gains (which was scheduled to increase to 20%).
- The employee share of the social security tax has been temporarily reduced (for 1 year) to 4.2% on earned income up to $106,800. Earned income up to that cap is subject to a 12.4% “social security” tax which is split between the employer and the employee; each contributing 6.2% (this 12.4% is also paid by self-employed workers). Under the deal, the employee’s portion of the tax will be cut to 4.2% for 1 year. There is no reduction in the employer’s share.
- The estate tax has a 2-year fix under which the exemption amount has been increased to $5 million (it had been $3.5 million under the old rules that expired at the end of 2009) and the top rate will be 35% (rather than the 55% scheduled to kick in on January 1st).
- Continuation of increased expensing write-off for newly acquired depreciable property. As a result of the tax legislation passed in September for property acquired in 2010 and 2011, a taxpayer can write-off in the year of purchase (rather than over a multi-year period), up to $500,000 for newly-acquired property. The expensing allowance was set to drop back to $25,000 beginning in 2012.
- Alternative minimum tax relief for approximately 22 million taxpayers. The details on this AMT relief also haven’t been published but this is probably being done by raising the AMT “exclusion amount” so that middle class taxpayers aren’t caught in this tax trap which was intended to catch high income taxpayers with a lot of itemized deductions.
This “deal” still has to get through the Senate where many Democrats and Republicans alike are unhappy with the compromise. In the meantime, this summary at least tells you where we stand at this point!
Questions?
2010 Tax Tips Series- Health Care Credits
December 2, 2010 | Subscribe to our RSS Feed
Tax Tips and Planning for 2010 continues with a third installment. After addressing credits for hiring, employee benefits and zoning/building, Tax Partner Steve Albert will explain the credits available to small businesses offering health care benefits to their employees.
The credit could be substantial, as Steve explains in the video below. For a closer look, here is the health care credit table he mentions.
Questions?
steven.albert@glassjacobson.com