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The IRS has released the 2018 optional standard mileage rates to be used to calculate the deductible costs of operating an automobile for business, medical, moving and charitable purposes. Beginning on January 1, 2018, the standard mileage rates for the use of a car, van, pickup of panel truck will be:

  • 54.5 cents per mile for business miles driven (up from 53.5 cents in 2017);
  • 18 cents per mile for medical and moving expenses (up from 17 cents in 2017); and
  • 14 cents per mile for miles driven for charitable purposes (permanently set by statute at 14 cents).

Comment. A taxpayer may not use the business standard mileage rate after using a depreciation method under Code Sec. 168 or after claiming the Code Sec. 179 deduction for that vehicle. A taxpayer may not use the business rate for more than four vehicles at a time. As a result, business owners have a choice for their vehicles: take the standard mileage rate, or “itemize” each part of the expense (gas, tolls, insurance, etc., and depreciation).


January 1, 2018 not only brings a new year, it brings a new federal Tax Code. The just-passed Tax Cuts and Jobs Act makes sweeping changes to the nation’s tax laws. Many of these changes take effect January 1. Everyone – especially individuals and business owners – needs to review their tax strategies for the new law. The changes are huge. However, many changes are temporary, especially for individuals.


The start of a New Year presents a time to reflect on the past 12 months and, based on what has gone before, predict what may happen next. Here is a list of the top 10 developments from 2017 that may prove particularly important as we move forward into the New Year:


The Tax Cuts and Jobs Act modifies Section 529 qualified tuition plans to allow the plans to distribute up to $10,000 in tuition expenses incurred during the tax year for designated beneficiaries enrolled at a public, private, or religious elementary or secondary school. Section 529 plans used to only be allowed for college tuition, up to full tuition amounts. That provision for college tuition remains the same.


Yes, conversions from regular (traditional) tax-deferred individual retirement accounts (IRAs) to Roth IRAs are still allowed after enactment of the Tax Cuts and Jobs Act. In fact, in some instances, such Roth conversions are more beneficial than they were prior to 2018, since the tax rates on all income, including conversion income, are now lower. However, the special rule that allows a contribution to one type of an IRA to be recharacterized as a contribution to the other type of IRA will no longer apply to a conversion contribution to a Roth IRA after 2017.


As an individual or business, it is your responsibility to be aware of and to meet your tax filing/reporting deadlines. This calendar summarizes important federal tax reporting and filing data for individuals, businesses and other taxpayers for the month of January 2018.


For Canadians trying to purchase their first home, putting together the required down payment, when Canadian house prices in most markets are at record highs, is often the biggest hurdle. And, if that weren’t enough, changes made to the rules governing the financing of home ownership over the past few years have set the bar even higher.


Lawmakers have departed Washington to campaign before the November 6 elections and left undone is a long list of unfinished tax business.  In many ways, the last quarter of 2012 is similar to 2010, when Congress and the White House waited until the eleventh hour to extend expiring tax cuts. Like 2010, a host of individual and business tax incentives are scheduled to expire.  Unlike 2010, lawmakers are confronted with massive across-the-board spending cuts scheduled to take effect in 2013.


In 2013, a new and unique tax will take effect—a 3.8 percent "unearned income Medicare contribution" tax as part of the structure in place to pay for health care reform. The tax will be imposed on the "net investment income" (NII) of individuals, estates, and trusts that exceeds specified thresholds. The tax will generally fall on passive income, but will also apply generally to capital gains from the disposition of property.


Taxpayers recovering from the current economic downturn will get at least some relief in 2013 by way of the mandatory upward inflation-adjustments called for under the tax code, according to CCH, a Wolters Kluwer business. CCH has released estimated income ranges for each 2013 tax bracket as well as a growing number of other inflation-sensitive tax figures, such as the personal exemption and the standard deduction.


Whether or not the IRS will allow a deduction for year-end bonuses for services performed during that year depends not only on the timing of the payment, but also the events surrounding the payment. If your business is planning to provide year-end bonuses to employees, you may find the following tax tips useful in your planning.


Throughout all of our lives, we have been told that if we don't want to work all of our life, we must plan ahead and save for retirement. We have also been urged to seek professional guidance to help plan our estates so that we can ensure that our loved ones will get the most out of the assets we have accumulated during our lifetime, with the least amount possible going to pay estate taxes.  What many of us likely have not thought about is how these two financial goals -- retirement and estate planning -- work together. 


How much am I really worth? This is a question that has run through most of our minds at one time or another. However, if you aren't an accountant or mathematician, it may seem like an impossible number to figure out. The good news is that, using a simple step format, you can compute your net worth in no time at all.


Q: The holidays are approaching and I would like to consider giving gifts of appreciation to my employees. What kinds of gifts can I give my employees that they would not have to declare as income on their tax returns?I also would like to make sure my company would be able to deduct the costs of these gifts.

Although the old adage warns against doing business with friends or relatives, many of us do, especially where personal or real property is involved. While the IRS generally takes a very discerning look at most financial transactions between family members, you can avoid some of the common tax traps if you play by a few simple rules.


You have just been notified that your tax return is going to be audited ... what now? While the best defense is always a good offense (translation: take steps to avoid an audit in the first place), in the event the IRS does come knocking on your door, here are some basic guidelines you can follow to increase the chances that you will come out of your audit unscathed.


Raising a family in today's economy can be difficult and many people will agree that breaks are few -- more people mean more expenditures. However, in recent years, the IRS has passed legislation that borders on "family-friendly", with tax credits and other breaks benefiting families with children. Recent legislation also addresses the growing trend towards giving families a break.


Q. I have a professional services firm and am considering hiring my wife to help out with some of the administrative tasks in the office. I don't think we'll have a problem working together but I would like to have more information about the tax aspects of such an arrangement before I make the leap. What are some of the tax advantages of hiring my spouse?


The responsibility for remitting federal tax payments to the IRS in a timely manner can be overwhelming for the small business owner -- the deadlines seem never ending and the penalties for late payments can be stiff. However, many small business owners may find that participating in the IRS's EFTPS program is a convenient, timesaving way to pay their federal taxes.


While one of the most important keys to financial success of any business is its ability to properly manage its cash flow, few businesses devote adequate attention to this process. By continually monitoring your business cycle, and making some basic decisions up-front, the amount of time you spend managing this part of your business can be significantly reduced.


Keeping the family business in the family upon the death or retirement of the business owner is not as easy as one would think. In fact, almost 30% of all family businesses never successfully pass to the next generation. What many business owners do not know is that many problems can be avoided by developing a sound business succession plan in advance.


If you use your home computer for business purposes, knowing that you can deduct some or all of its costs can help ease the pain of the large initial and ongoing cash outlays. However, there are some tricky IRS rules that you should consider before taking - or forgoing - a deduction for home computer costs.


If you are considering selling business property that has substantially appreciated in value, you owe it to your business to explore the possibility of a like-kind exchange. Done properly, a like-kind exchange will allow you to transfer your appreciated business property without incurring a current tax liability. However, since the related tax rules can be complex, careful planning is needed to properly structure the transaction.


Starting your own small business can be hectic - yet fun and personally fulfilling. As you work towards opening the doors, don't let the onerous task of keeping the books rain on your parade. With a little planning upfront and a promise to "keep it simple", you can get an effective system up and running in no time.


Business travel expenses are not created equal - some special rules apply to certain types of expenditures. Before you pack your bags for your next business trip, make sure that you have planned ahead to optimize your business travel deductions.


The benefits of owning a vacation home can go beyond rest and relaxation. Understanding the special rules related to the tax treatment of vacation homes can not only help you with your tax planning, but may also help you plan your vacation.