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“Taxing” is a word synonymous with “onerous” and “wearing.” Bond Beebe, Accountants & Advisors, have created a user friendly blog called “It’s Taxing” to inform and educate our clients and business associates on timely topics related to tax, estates, accounting and finance. We hope our blog answers your questions and alleviates the heavy burden and anxiety related to understanding complicated tax laws and related matters.
IRS CIRCULAR 230 DISCLOSURE: To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. federal tax advice contained in this document is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code, or (ii) promoting, marketing, or recommending to another party any transaction or matter that is contained in this document.
Due to increases in the price of fuel, the IRS announced today an increase in the optional standard mileage rates effective July 1,2011. The new standard mileage rates are 55.5 cents per mile for business use of an automobile and 23.5 cents per mile for medical or moving. The mileage rate for charitable miles is fixed by law and remains at 14 cents.
Here are four ways to make your required business travel a little less stressful:
Saturday night stay-overs: Your out-of-town business chores conclude on Friday and you would like to extend your business trip to take advantage of a low-priced fare requiring a Saturday night stay-over. The IRS says that if the savings in airfare are higher than the costs of the weekend meals and lodging, then you can deduct your Saturday meal and lodging expenses.
Do you have a personal disaster recovery plan? We like to think disasters can never happen here, but as we have seen by many recent tragedies across the globe, disaster can strike anywhere and when we least expect it.
The IRS recently released a very helpful and timely guide to safeguarding tax records in concurrence with the start of Hurricane Season on June 1st. Nonetheless, here are some additional steps recommended by the IRS for you to safely store your records prior to an emergency.
‘Recently being in the market to upgrade my car to a more fuel economic vehicle, I went to the neighborhood dealership. Financing the vehicle is probably the only way I could afford the purchase until I saw the terms of the loan, which were approximately $32,000 at almost 4.5% interest over the next five years. Perhaps the economy has not turned for me as quickly as it has for others, but I left the offer on the table and began to look at my options. Maybe I could ask my grandfather for the money and then I could pay him back the $32,000, which may work out well for me and my credit?’ –A FICTIONAL SCENARIO
Typically, we would see the grandfather agree to make the loan of $32,000 and tell his grandson he can pay him back when he can. There are no written terms, no stated interest rate and no real expectation to receive repayment in a timely fashion. After all this is a loan between family? This model can be defined as a demand loan and further categorized as a gift loan by the IRS standards outlined in §7872. The IRS defines multiple loan arrangements like this in §7872 including compensation related loans, corporate-shareholder loans, certain qualified care contracts and the aforementioned gift loans. Now de minimus exceptions may apply to these loans under $10,000, however, the IRS attempts to enforce guidelines on these types of loans which are generally offered at below market interest rates and/or ‘interest-free.’ (i.e. – loans to business partners, family members, etc.)
IRS just announced that interest rates for the calendar quarter beginning July 1st, will be the same as in the previous quarter. For more information, including rates, please follow the IRS link below:
Since 1976 there has been a 0.2% FUTA surtax. Currently, the gross federal unemployment tax rate that employers pay on the first $7,000 of wages paid to each employee is 6.2%, which is made up of the 6% permanent tax and 0.2% temporary surtax.
The 0.2% temporary surtax is currently set to expire on June 30, 2011.