Tax Tips Newsletter
Serving you since 1993
February 2015 - Vol 10, Issue 1
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Greetings!
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Tax season is officially underway. The organizers have been e-mailed or mailed out to you. If you have not received your organizer yet please call and we will make sure you get it. Please make your appointment or get your tax information to us as soon as possible.

We have started to roll out our portal. You may have already received an e-mail to register with SecureDrawer. The portal will allow us to upload copies of your tax returns and other documents so that you can access them at any time. In addition, you will be able to upload documents to us. We will continue to use the account at Hightail. The disadvantage of Hightail is that the documents expire after a short time. Please let us know how you like the new portal.

This tax season we are also able to offer the ability to e-sign your e-file authorization forms for your individual tax returns. This process is done through DocuSign. We will ask you first if you would like to sign your e-file forms.

If you want to e-sign we will send you your tax returns first to review. Next we will send you an invitation to sign the documents. DocuSign partners with Equifax and uses information from Equifax to ask you several questions to authenticate your identity. One you have authenticated your identity you are able to sign the documents. We are able to track when they are signed and then we transmit your returns.

Beginning this Friday, February 13th the office will be open on Fridays through April 15th. Our official office hours are 9:00 - 5:00 Monday through Friday. If you need an appointment outside of those hours or on the weekend please contact us.

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Just before adjourning for 2014, Congress passed a bill retroactively extending more than 50 tax breaks, often collectively referred to as the "tax extenders." These tax breaks had already expired, but the new bill, the Tax Increase Prevention Act of 2014, extended them retroactively to January 1, 2014. The extensions granted in the bill remain in effect through December 31, 2014. For these tax breaks to survive beyond that point, they must be renewed by Congress in 2015.

Here are some highlights from the law.

* The new law retains an optional deduction for state and local sales taxes in lieu of deducting state and local income taxes.

* The maximum $500,000 Section 179 deduction for qualified business property is reinstated for 2014. The deduction is phased out above a $2 million threshold.

* 50% bonus depreciation for qualified business property is revived. The deduction may be claimed in conjunction with Section 179.

* Parents may be able to claim a tuition-and-fees deduction of up to $4,000 for qualified higher education expenses. The amount of the deduction is linked to adjusted gross income.

* An individual age 70½ or older could transfer up to $100,000 tax-free from an IRA to a charity.

* Homeowners can exclude tax on mortgage debt cancellation or forgiveness of up to $2 million on a principal residence.

* Taxpayers can take a credit of 10% of the cost of energy-saving improvements installed in the home, subject to a $500 lifetime limit.

* Educators can take an above-the-line deduction of up to $250 for classroom supplies purchased with their own funds.

Please contact me if you need more details on these or other provisions that apply to you.
Business Plan
The IRS recently announced that the mileage rate for business driving in 2015 will be 57.5¢ a mile, a slight increase from the 2014 rate of 56¢ per mile. The rate can be used for cars, vans, pickups, and panel trucks.

Companies that don't want to keep track of the actual costs of using a vehicle for business purposes may use this standard mileage rate instead. An annual study of the fixed and variable costs of operating an automobile is used to determine what the standard mileage rate will be for a given year.

In addition to the mileage rate, a separate deduction may be claimed for parking fees, tolls, interest relating to the purchase of the automobile, and state and local personal property taxes.

The standard business mileage rate can't be used for automobiles used for hire (e.g., taxicabs) or for fleets of automobiles used simultaneously by the taxpayer. Nor can the standard rate be used if the vehicle was previously depreciated by other than the straight-line method, including using bonus depreciation or the Section 179 deduction.

When the business mileage rate is used in 2015, depreciation will be considered to have been allowed at a rate of 24¢ a mile. This depreciation reduces the taxpayer's cost basis in the vehicle. .

The 2015 rate for medical and moving driving decreases to 23¢ a mile. The rate for charitable driving remains at 14¢ a mile.
Winter Reflection
Tax Tip of the Week: The Tax Tip of the Week discusses various filing statuses and which fits your situation.

Business Tip of the Month: The Business Tip of the Month tells you how to "audit" your business to improve your efficiency and effectiveness.

Financial Tip of the Month: If one of your new years resolutions was to build an emergency fund, this article gives you 4 tips on how to do it.

Fraud Alert: This month's fraud alert is how to avoid plumbing scams.
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Let me know if I can help you with any Quickbooks problems.

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Sincerely,
Linda Heineman
Linda L. Heineman, CPA

phone: 626-577-0979