November 10, 2016
Hot Topics with Smith Tax & Bookkeeping
- It’s hard to believe 2016 is almost over! We have 46 days until Christmas and 160 days until the tax deadline, which is April 17, 2017.
- The tax season for paper and electronically filed returns will open on January 19, 2017, so don’t wait until the last minute to start getting your paper work in order.
- Many business owners have concerns about what they can and cannot claim as expenses for their business from year to year, so I will address some of those common concerns as we approach tax season in the weeks to come.
- 2016 Mileage Rates
- The IRS as of December 2015, announced the 2016 mileage rates that can be used to calculate deductible cost to operate an automobile for business, charity, moving and medical expenses.
- As of January 1, 2016, the standard mileage rate for car, which also includes vans, pickups or panel trucks are:
- You are allowed the option of calculating actual cost of using your vehicle rather than using the standard rates, but keep in mind you cannot use if you use any depreciation method under MACRS (Modified Accelerated Cost Recovery System) or the 179 deduction; nor can you use standard mileage rate for more than four vehicles that are used simultaneously.
- Deductions for Professionals
- If you started your business in 2016 as a self-employed professional in the course of your work the following expenses are allowed as deductions from income when figuring profit from your practice on the Schedule C:
- Many self-employed people look at daily lunches with an associate as an expense, but the tax courts agreed with the IRS that professionals do not need to have lunch together daily just to discuss business therefore the meals are not deductible.
- Home Office Deduction
- I do hope these topics help answer questions that you have regarding your taxes as a self-employed professional and I will cover more in the weeks to come.