2012 Standard Mileage Rates Released

2012 federal standard mileage rates were recently announced in IR News Release 2011-116. The business standard mileage rate will remain unchanged at 55.5 cents per mile. Medical mileage will decrease to 23 cents per mile and the charitable mileage rate remains at 14 cents per mile.

Remember, in most cases standard mileage is not required and taxpayers can instead choose to deduct the actual cost of operating their vehicle. As always, adequate documentation is required to support the business use of your vehicle.

Roth Conversion Planning

With the end of the year coming up it seems appropriate to mention an often overlooked potential planning strategy. For some taxpayers who have very little ordinary income and still have deductions resulting in little to negative taxable income for the year, it may make sense to consider doing a Roth conversion on a portion of any tax-deferred retirement accounts. Read more

100% Bonus Depreciation… while supplies last!

With year end approaching, we felt it would be appropriate to remind our clients of the 100% Bonus Depreciation deduction that is expiring at the end of 2011. For all eligible assets placed in service before December 31, 2011, you may deduct 100% of the cost on your tax return. That is a full, 100% deduction for major equipment, computers, and other business use assets. Bonus Depreciation is not subject to the typical limitations that Section 179 expense is subject to. For instance, Bonus Depreciation can create a loss that can be carried back to prior years to claim a refund. Bonus Depreciation is also not subject to dollar limitations on assets placed in service like the Section 179 deduction is. Read more

Estate Tax “Portability”

In 2010 Congress introduced estate tax “portability” for estates of decedents who die in 2011 or 2012. For estates of decedents dying in 2011 or 2012 the estate can generally exclude up to $5 million from their taxable estate. If a married individual dies in 2011 or 2012 and they do not use their full $5 million exclusion the unused amount can be passed on to the surviving spouse. In other words, the exclusion is “portable”. This sounds simple enough right? Let’s take a closer look at the details. Read more

2011 Schedule D Gets a New Look

The IRS has revamped the 2011 Schedule D for reporting capital gains and losses. As part of the change a new Form 8949 will have to be completed before completing Schedule D. Although still in draft form, the 8949 will require taxpayers to report the normal details of their capital transactions, such as the date of acquisition, date of sale, cost basis and sales price. A separate 8949 will have to be prepared for each different type of transaction and taxpayers will have to indicate if a 1099-B was received and if the 1099-B listed basis information. Read more