MMA CPA

Standard Mileage vs. Actual Vehicle Expense Deduction Did You Know? If you use your car, van or truck for business purposes, you may be able to claim a vehicle expense deduction on your tax return. You may either use the standard mileage rate or report the actual expenses associated with business uses of the vehicle. Actual expenses include gas, repairs, insurance and depreciation. Each expense must be prorated based on how much you use the vehicle for business rather than ...personal purposes, so extensive record keeping is required. Claiming the standard mileage rate, on the other hand, requires only tracking the number of miles you drive for business purposes throughout the year. Simply multiply your yearly mileage total by the standard rate, which will be 58 cents per mile for 2019. As a broad rule, the standard rate may yield a larger deduction for fuel-efficient and older vehicles, whereas deducting actual expenses may be advantageous for many newer vehicles. However, in order to be able to choose the method that gives you the largest possible deduction each year, you must use the standard rate for the first year that the vehicle is used for business.

IRS Private Debt Collectors - Did You Know? The IRS may assign certain cases of overdue debts to private debt collectors, but only after giving written notice. Any payment to the private debt collectors should only be made payable to the U.S Treasury. There are currently only four contractors authorized for collection: CBE Group of Cedar Falls, Iowa; Conserve of Fairport, N.Y.; Performant of Livermore, Calif.; and Pioneer of Horseheads, N.Y.

Qualified Business Income Deduction Did You Know? The Tax Cuts and Jobs Act (TCJA) created a new deduction for many taxpayers with business income. The Qualified Business Income (QBI) deduction applies to income derived from pass-through entitiesbusinesses whose earnings are reported on individual owners' tax returns rather than corporate returns. If you are a sole proprietor, partner, LLC owner, or shareholder in an S corporation, you may be eligible to claim the deduction. If you qualify, you may be able to deduct a portion of your business earnings from your adjusted gross income (AGI) on your tax forms. Because the QBI deduction reduces your taxable income, it may result in significant tax savings.

Student Loan Interest Deduction Did You Know? If you have student loans, you may be able to deduct up to $2,500 per year in loan interest on your federal tax forms. Because this deduction is classified as an adjustment to your gross income, you do NOT have to itemize deductions in order to claim it. For any loan on which you paid $600 or more in interest during the year, you should receive a Form 1098-E from the loan issuer to help you prepare your federal return.... The student loan interest deduction is phased out for individual taxpayers with a modified adjusted gross income above $65,000 (or $135,000 for joint filers). Additional IRS rules may affect whether your loans qualify for the deduction.

Home Energy Tax Credits Did You Know? If you purchased alternative energy equipment for your home in 2018, you may be eligible for a tax credit of up to 30% of the cost of materials and installation. Qualifying equipment may include solar water heaters, solar panels, and fuel cell systems. If you end up owing no tax for 2018, you may be able to carry any surplus energy tax credit over to future years. Under current laws, credits for home renewable energy equipment may be reduced after 2019 and will expire completely in 2021.

Summer Jobs - Did You Know? If you're starting a summer job or know a teen or student who is, here is a useful tax-saving tip: Students and teenage employees normally have taxes withheld from their paychecks by their employer after filling out a Form W-4.... However, if the job is regarded as self-employment, like baby-sitting or lawn care can be, they should keep good records of all expenses to help maximize potential deductions. In the case of lawn care, potential deductible expenses may include: business cards, fliers, fuel, equipment rentals, chemicals, work mileage, etc.

Quarterly Estimated Tax Payments - Reminder If you are making quarterly estimated tax payments to the IRS, the due date for the April 1 - May 31 quarter of the year is June 15th. For payments made using IRS Direct Pay, you can make payments until 8PM EST, and for payments using a credit or debit card, payments can be made up to midnight on the due date.... If the due date for making an estimated tax payment falls on a Saturday, Sunday, or legal holiday, the payment will be considered on time if you make it on the next day that's not a Saturday, Sunday, or legal holiday.

Overseas Tax Filing Extension Deadline - Reminder If you are a U.S Citizen or Green Card Holder living abroad or in active military service and have not filed your taxes yet, the deadline is coming up on June 17th, 2019. The extension is for the date to file, not to pay. Any interest on the taxes owed will be calculated from the regular due date of the return, April 15th, 2019.

National 529 College Savings Day - Did You Know? If you put money in a 529 account for education, withdrawal of earnings are tax-free if used for qualified educational expenses. Qualified educational expenses include tuition, fees, housing, meals and books. Many states offer a full or partial tax deduction for 529 plan contributions. They may also offer incentives and promotions to encourage families to open and contribute to 529 accounts today for National 529 College Savings Day. The 2017 Tax Cuts and Jobs Act (TCJA) also expanded eligibility for 529 savings plans. Up to $10,000 per year can now be used for Kindergarten through Grade 12 education (public, private, or religious schools). This was previously limited to post-secondary education only.

Charitable Donations of Property Did You Know? If you choose to itemize, donating furniture, vehicles, or other property to IRS-approved charitable organizations allows you to improve the lives of others while reducing clutter in your own, all while gaining a valuable tax deduction. In many cases, the allowed deduction is equal to the fair market value of the property you donate. However, for property that appreciates in value, such as artwork or musical instruments, specia...l rules govern the allowable deduction amount. The size of your deduction may also be affected by your adjusted gross income (AGI) and whether you made monetary charitable donations during the same tax year. Deductions of $250 or more require a written acknowledgement from the receiving organization, and those of over $500 require additional documentation. Any deduction for a donation of property valued at over $5,000 requires a certified appraisal.

Home Equity Loan Interest Deduction Did You Know? The Tax Cuts and Jobs Act (TCJA) of 2017 eliminated the deduction for interest on most home equity loans. However, you may still be able to deduct some or all of the interest you paid on a home equity loan if you used loan funds to build, expand, or substantially improve your home. Examples of potentially qualifying projects include building a carriage house or three-season porch, expanding your garage, or replacing your roof.

Education Benefits - Did You Know? The 2017 Tax Cuts and Jobs Act has expanded eligibility for Section 529 savings plans. Up to $10,000 per year can now be used for Kindergarten through Grade 12 education (public, private, or religious schools). This was previously limited to post-secondary education only.

Refund Amounts - Did You Know? If your refund amount is different than stated on the filed tax return, part or all of your refund may have been used to pay off (offset) past-due federal tax, student loans, state income tax or other past-due debts. You'll receive a notice from the IRS if such an offset occurs that will show the original tax refund amount, the offset amount, as well as the name, address and telephone number of the agency receiving the payment.... If you have not received your refund yet, you may check the status using the tool at: https://www.irs.gov/refunds. The 'Where's my Refund' tool is updated once daily, usually overnight. Your status is generally available within 24 hours upon the IRS receiving your e-filed return and 4 weeks after mailing your paper return.

Standard Mileage vs. Actual Vehicle Expense Deduction Did You Know? If you use your car, van or truck for business purposes, you may be able to claim a vehicle expense deduction on your tax return. You may either use the standard mileage rate or report the actual expenses associated with business uses of the vehicle. Actual expenses include gas, repairs, insurance and depreciation. Each expense must be prorated based on how much you use the vehicle for business rather than ...personal purposes, so extensive record keeping is required. Claiming the standard mileage rate, on the other hand, requires only tracking the number of miles you drive for business purposes throughout the year. Simply multiply your yearly mileage total by the standard rate, which will be 58 cents per mile for 2019. As a broad rule, the standard rate may yield a larger deduction for fuel-efficient and older vehicles, whereas deducting actual expenses may be advantageous for many newer vehicles. However, in order to be able to choose the method that gives you the largest possible deduction each year, you must use the standard rate for the first year that the vehicle is used for business.

IRS Private Debt Collectors - Did You Know? The IRS may assign certain cases of overdue debts to private debt collectors, but only after giving written notice. Any payment to the private debt collectors should only be made payable to the U.S Treasury. There are currently only four contractors authorized for collection: CBE Group of Cedar Falls, Iowa; Conserve of Fairport, N.Y.; Performant of Livermore, Calif.; and Pioneer of Horseheads, N.Y.

Qualified Business Income Deduction Did You Know? The Tax Cuts and Jobs Act (TCJA) created a new deduction for many taxpayers with business income. The Qualified Business Income (QBI) deduction applies to income derived from pass-through entitiesbusinesses whose earnings are reported on individual owners' tax returns rather than corporate returns. If you are a sole proprietor, partner, LLC owner, or shareholder in an S corporation, you may be eligible to claim the deduction. If you qualify, you may be able to deduct a portion of your business earnings from your adjusted gross income (AGI) on your tax forms. Because the QBI deduction reduces your taxable income, it may result in significant tax savings.

Student Loan Interest Deduction Did You Know? If you have student loans, you may be able to deduct up to $2,500 per year in loan interest on your federal tax forms. Because this deduction is classified as an adjustment to your gross income, you do NOT have to itemize deductions in order to claim it. For any loan on which you paid $600 or more in interest during the year, you should receive a Form 1098-E from the loan issuer to help you prepare your federal return.... The student loan interest deduction is phased out for individual taxpayers with a modified adjusted gross income above $65,000 (or $135,000 for joint filers). Additional IRS rules may affect whether your loans qualify for the deduction.

Home Energy Tax Credits Did You Know? If you purchased alternative energy equipment for your home in 2018, you may be eligible for a tax credit of up to 30% of the cost of materials and installation. Qualifying equipment may include solar water heaters, solar panels, and fuel cell systems. If you end up owing no tax for 2018, you may be able to carry any surplus energy tax credit over to future years. Under current laws, credits for home renewable energy equipment may be reduced after 2019 and will expire completely in 2021.