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The standard mileage rates you can use to calculate your deductible vehicle expenses during 2016 for business, medical, and moving mileage have decreased from last year. Here's a recap.
Business. Starting January 1, you can reimburse yourself or your employees 54 cents per mile when you use your personal vehicle for business purposes. That's down from 57.5 cents in 2015. The standard business mileage rate includes an allowance for depreciation of 24 cents a mile that reduces your cost basis in the vehicle.
Remember to keep "enhanced" records to support your deduction for mileage. For car expenses, "enhanced" means that at or near the time you use a vehicle for business purposes, you write down the date, the mileage, your destination, and the purpose of the trip in a logbook or other record. Keep receipts for parking fees and tolls too. You can deduct those expenses even if you use the standard mileage rate.. Medical and moving. The rate for medical and moving mileage decreases from last year's 23 cents a mile to 19 cents a mile.
Charity. The general rate for charitable driving remains 14 cents a mile. |
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You've already heard that depreciation tax breaks were extended for 2015. But do you know the same extenders law made modifications to the Section 179 expensing election for 2016? These modifications took effect as of January 1. Here's what you need to know as you make asset purchasing decisions this year.
Section 179 overview. The basic Section 179 expensing limit for 2016 is $500,000. The limit is reduced dollar for dollar once purchases exceed $2,000,000. You can use Section 179 for both new and used equipment. * Change #1. Beginning in 2016, the $500,000 and $2,000,000 limits are both indexed for inflation, so your deduction for this tax year may be a bit higher. * Change #2. The definition of "Section 179 property" now permanently includes computer software and real property such as qualified leasehold and retail improvements and restaurant property. That means you can elect to use Section 179 expensing when you purchase those assets.
* Change #3. You may be able to deduct more of qualified leasehold or retail improvement and restaurant property in 2016. Beginning this year, the law eliminated the $250,000 cap on the amount of Section 179 you could claim for this property.
* Change #4. Beginning in 2016, air conditioning and heating units are eligible for Section 179 expensing. Contact me for help in maximizing the Section 179 deduction available for your business asset purchases . |
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The tax extenders law passed in mid-December changed some of the rules for claiming bonus depreciation in 2016. While the amount you can deduct for 2016 is still 50% of the cost of qualified assets you buy, certain restrictions have been lifted.
Bonus depreciation overview. Bonus depreciation is an additional deduction of 50% of the cost of certain property you place in service during the year. Bonus depreciation is available only for new equipment purchases and applies for the first year you place the property in service. You claim bonus depreciation after any Section 179 deduction and before you figure regular depreciation. * Change #2. Starting this year, two of the restrictions limiting the amount of bonus depreciation you can claim on qualified leasehold improvements have been lifted. First, you can claim bonus depreciation for qualified improvement property even if the improvements are not made under a lease. Second, the improvement you make no longer has to be placed in service more than three years after the building was first placed in service.
* Change #3. Certain trees, vines, and plants bearing fruit and nuts are considered placed in service and eligible for 50% bonus depreciation when planted or grafted. This allows depreciation to be taken sooner than under the old rule. Prior to 2016, these plants were considered placed in service when they reached an income-producing stage. Need more information? Contact me with your questions. |
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Tax Tip of the Week: Are you getting calls from the IRS? If you're not expecting any calls then, most likely, it's not a legitimate call. Read this article for more info as it seems that this is happening more often and it's usually a scammer, not the IRS.
Business Tip of the Month: Employee access to technology can pose a risk to your company. There is so much information that is available to your employees so when an employee leaves your company, you need to protect the sensitive data that he/she has had access to. This article gives you some good info as to how to protect yourself. Financial Tip of the Month: Is holiday debt weighing you down? Did you blow your budget and just went wild with the credit cards in December and now getting the bills? Read this article for some good tips on how to pay of that debt and not do it again.
Fraud Alert: Too-good-to-be-true rental listings are just that - too good to be true!! It's in the perfect area, there are a lot of amenities, it's a great price for the size, it's in perfect condition and it accepts your little furry friend! These are usually scams and there is not such place. Read this article for more info on what to look for before wasting your time, money and energy on an allusive perfect place to live! |
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Let me know if I can help you with any Quickbooks problems.
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https://www.facebook.com/pages/Linda-L-Heineman-CPA/266124360085715?ref=tn_tnmn
Sincerely,
Linda Heineman
Linda L. Heineman, CPA
email:
linda@llhcpa.com
phone:
626-577-0979
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