Standard Mileage Rates for 2017

Beginning on Jan. 1, 2017, the standard mileage rates for the use of a car, van, pickup or panel truck are:

• 53.5 cents per mile for business miles driven, down from 54 cents for 2016
• 17 cents per mile driven for medical or moving purposes, down from 19 cents for 2016
• 14 cents per mile driven in service of charitable organizations

The business mileage rate decreased half a cent per mile and the medical and moving expense rates each dropped 2 cents per mile from 2016. The charitable rate is set by statute and remains unchanged.

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. Read more

Paying Taxes on Household Help

If you employ someone to work for you around your house, it is important to consider the tax implications of this arrangement. While many people disregard the need to pay taxes on household employees, they do so at the risk of paying stiff tax penalties down the road.

As you will see, the rules for hiring household help are quite complex, even for a relatively minor employee, and a mistake can bring on a tax headache that most of us would prefer to avoid.

Commonly referred to as the “nanny tax”, these rules apply to you only if (1) you pay someone for household work and (2) that worker is your employee.

1. Household work is work that is performed in or around your home by baby-sitters, nannies, health aides, private nurses, maids, caretakers, yard workers, and similar domestic workers.A household worker is your employee if you control not only what work is done, but how it is done.

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Tax Changes for 2017: A Checklist

Welcome, 2017! As the New Year rolls around, it’s always a sure bet that there will be changes to current tax law and 2017 is no different. From health savings accounts to tax rate schedules and standard deductions, here’s a checklist of tax changes to help you plan the year ahead.

Individuals

For 2017, more than 50 tax provisions are affected by inflation adjustments, including personal exemptions, AMT exemption amounts, and foreign earned income exclusion.

While the tax rate structure, which ranges from 10 to 39.6 percent, remains the same as in 2016, tax-bracket thresholds increase for each filing status. Standard deductions and the personal exemption have also been adjusted upward to reflect inflation. For details see the article, “Tax Brackets, Deductions, and Exemptions for 2017,” below.

Alternative Minimum Tax (AMT)
Exemption amounts for the AMT, which was made permanent by the American Taxpayer Relief Act (ATRA) are indexed for inflation and allow the use of nonrefundable personal credits against the AMT. For 2017, the exemption amounts are $54,300 for individuals ($53,900 in 2016) and $84,500 for married couples filing jointly ($83,800 in 2016). Read more

10 Tax-Saving Strategies for 2016

2016 has been an interesting year. We suspect for many of us it has or will invoke much change. As the end of 2016 nears, it’s time to consider the impact tax will have on your business and life. As your tax advisor, we want to share these essential tax saving strategies with you.

The “Trump Effect”

In light of the November election and highly likely changes to the tax code in 2017, there are a few additional tax strategies to consider in addition to some of the normal “tried and true” methods. We won’t know the full impact of the pending political influence but until we do, here are ten essential tax saving strategies for you to consider.

Accelerate deductions

Traditional tax planning has always focused on accelerating deductions to obtain a current tax benefit. This strategy takes on even more significance as tax rates are expected to go down for many individuals and businesses based on the Congressional proposals being floated around. For taxpayers in the top tax bracket of 39.6%, we are looking at a maximum rate of 33% in 2017 and beyond. Additionally, limitations or caps on itemized deductions are being proposed. Moving deductions forward to 2016 from 2017 could result in a nearly 7% savings over waiting until 2017, or more. Read more

2016 Recap: Tax Provisions for Businesses

Whether you file as a corporation or sole proprietor here’s what business owners need to know about tax changes for 2016.

Standard Mileage Rates
The standard mileage rates in 2016 are as follows: 54 cents per business mile driven, 19 cents per mile driven for medical or moving purposes, and 14 cents per mile driven in service of charitable organizations.

Health Care Tax Credit for Small Businesses
Small business employers who pay at least half the premiums for single health insurance coverage for their employees may be eligible for the Small Business Health Care Tax Credit as long as they employ fewer than the equivalent of 25 full-time workers and average annual wages do not exceed $52,000 (adjusted annually for inflation) in 2016.

In 2016 (as in 2015 and 2014), the tax credit is worth up to 50 percent of your contribution toward employees’ premium costs (up to 35 percent for tax-exempt employers). For tax years 2010 through 2013, the maximum credit was 35 percent for small business employers and 25 percent for small tax-exempt employers such as charities. Read more