|
|
Standard Mileage Deduction Rates - 2005 and 2006
If you're in business, you're interested in the IRS mileage deduction rates. The 2005 rates fluctuated because of high gas prices and now the 2006 rates have been released.
Standard Mileage Deduction - 2005
In a move not seen for some time, the IRS actually issued two different mileage deduction rates in 2005. Mileage deduction rates are the dollar value per business mile traveled that you can claim as a deduction. For instance, if you traveled 1,000 miles in your vehicle on business in 2005, you can deduction 1,000 multiplied by the designated rate.
For the first eight months of 2005, the standard mileage deduction rate was 40.5 cents a mile. Using our previous example, a person who drove 1,000 business miles in the first months of 2005 would be able to deduct $405.
As we all know, gas prices went through the roof in the last four months of the year. In a tremendous move, the IRS raised the standard mileage deduction to 48.5 cents for business miles undertaken from September through December. This equates to a deduction of $485 using our example.
This increased rate only applies to the time period of September through December. It does not retroactively apply to the first eight months of the year. The IRS has not issued any directions regarding how the two different rates will be noted on 2005 tax returns.
Standard Mileage Deduction - 2005
This past week, the IRS issued the standard mileage rates for the 2006 year. The new rate for standard business mileage will be 44.5 cent per mile. This rate should be used when you prepare your tax return for the 2006 year, to wit, in 2007.
The IRS should be applauded for raising the standard mileage rate for the last four months of 2005. Still, I am sure we would all prefer lower gas prices.
|
| Irs Related News
|
Related Articles
- W-2s
There has never been a more welcomed term in the adult taxpayer's life, than the invention of the W-2 and January 31st; let's take a moment to examine the W-2, and what it really means to the average taxpayer....
- The Principles On Paying Tax
Why Tax Loop Holes Must ExistA long long time a go, in a country far far away, in China to be exact, there was a hunter that put nets in 4 sides of the forest. The hunter wanted to catch all animals. Then...
- Roth IRA Contributions
Confused about whether you can contribute to a Roth IRA? Try using these simple rules:IncomeTo contribute to a Roth IRA, you must have compensation (e.g., wages, salary, tips, professional fees, bonuses)....
- Tax Tips for IT Consultants and Contractors
I live and work, quite literally, down the road from the main Microsoft campus. No surprise, then, that I'm commonly asked by freelance consultants for the best ways that these self-employed independent...
- How The Gift Tax Works
Each year millions of Americans give a gift to other individuals that they know. Gifts can be considered anything from a new vehicle, to a trip, to a piece of land. A gift tax is a tax that is imposed...
- When to use Quicken for Mutual Fund Recordkeeping
While you might assume any mutual fund investor should use Quicken's mutual fund record-keeping tools, that isn't the case. Because investment record keeping, including mutual fund record keeping, requires...
- What To Do If You Didn't Get a Form 1099
If you earned revenues as an independent contractor in 2005, you should have received a 1099 Form for the work. So, what if you haven't received one? What To Do If You Didn't Get a Form 1099If you earned...
- Income Tax Software - The Best Ones On The Market
There are several income tax software programs available on the market to help you complete your yearly taxes. These programs offer tax tips, checklists, and error checking messages to ensure that required...
- A Big Tax Loophole Just Got Bigger
Believe it or not, there are ways to convert taxable incomeinto non-taxable income, without any fear of an IRS audit.Here's one of my favorites. It's been part of our belovedtax code for over 30 years,...
- Tax Treatment for Coverdale IRAs
A number of publications, including my own, have mistakenly reported over the past year that Coverdale IRAs, formerly known as Education IRAs, are tax deductible. Coverdale IRAs are not tax-deductible.Originally...
- Tax Invoice
A tax invoice is a legal document that offers a look at what the GST is for a transaction. Read on to learn about your obligations for issuing, holding, and supplying the different types of tax invoices.You...
- How To Turn Business Losses Into Cash Flow
By Christopher Raynalwww.masteraccountants.co.nzYou have permission to publish this article electronically or in print, free of charge, as long as the bylines are included. A courtesy copy of your publication...
- Personal Income Tax Returns
Personal income tax, as we know it today, was originally enacted by Congressional law during the ratification of the sixteenth Amendment in 1913. Although we have experienced many changes to the system...
- Thinking of using Dubai as an offshore jurisdiction?
Think Again! Read below for a comparison.This is an interesting jurisdiction. In Dubai there are no taxes of any sort one has to contend with, so there is no tax filing and no tax audits, etc. Most offshore...
- New Support For Website and Graphic Design Firms
Professional web and graphic designers work very hard for their fee, there's no doubt about it. With these professionals working hard to provide great client service, meet strict deadlines, be creative...
- 1099-MISC Forms For Independent Contractors for 2005
As we begin 2005, you're probably not thinking about taxes at all. This is a mistake as deadlines are approaching for issuing and filing 1099s to independent contractors.What is a 1099 MISC?Generally speaking,...
- Innocent Spouses - Relief from Taxes
Historically, tax issues arising from bad marriages fell into the category of "better or worse" for marriages. The IRS granted no innocent spouse tax relief, but has changed its views.Tax ReliefWhen a...
- How To Prepare Your Income Tax Return
The first step in your income tax preparation is to work out your total income. A person's total income includes many kinds of receipts such as wages, interest, alimony, lottery winnings and many more....
- Low-Tax States Have Stronger Economies
A new study of state tax burdens ound that low-tax states outperform the higher tax states in employment, personal income and population.The report, entitled "High Taxes Lower Economic Performance," was...
- Tax Preparation Software
Web-based tax preparation services have a few advantages over their desktop counterparts for certain categories of users. So, if you have avoided doing your taxes online until now, you should start considering...
- What is a Dependent?
Other than fitting the description of a constant liability, what other qualifying attributes must one have, to be classed as a dependent, and how do you determine this for tax purposes? The following paragraphs...
- Family Limited Partnership Overview, Part II
Income Tax BenefitsFLPs also provide a number of valuable income tax benefits to the partners. Among these benefits are the following:* Allows pass through of items of income, expense, credit and deduction...
- There Is No Such Thing As Tax Simplification!
I'm a little upset right now, so please bear with me. Idon't get upset very often - you can always tell becausesmoke starts coming right out of the top of my bald head! -but I'm here to tell ya', this...
- Is Your Ebay Income Taxable?
The income you get from selling items on eBay is just like the income you get from any other business: it is taxable, at least in theory. In practice, many get away without declaring profits from their...
- Convert To Roth IRA Regardless of Income - 2010
An odd quirk in the recent legislation to extend the Bush Tax Cuts is giving IRA holders a huge break. For one year, and one year only, the income cap will be gone. Convert To Roth IRA Regardless of Income...
- RETIREMENT TAX HAVENS
RETIREMENT TAX HAVENSFinancial planning is really life planning. Choosing a home, particularly a retirement home, involves many factors. With state and local taxes on the rise, retirees should look closely...
- History Of Taxes In America
The first attempt to impose an income tax on America occurred during the War of 1812. After more than two years of war, the federal government owed an unbelievable $100 million of debt. To pay for this,...
- Capital Gains Tax
The current tax system imposed on corporations by the U.S. government is at best, a biased system; for corporations that have a net profit, taxes on those profits amount to a full one-third. So, if you're...
- New for 2006, the Roth 401k Plan
One of the new tax strategies available in 2006 is the Roth 401k. A taxpayer may place up to $15,000 ($20,000 if age 50 or older) in a Roth 401k instead of a regular 401k plan in 2006. The 401k plan needs...
- Employment Taxes - Depositing With The IRS
If your business has employees, you must pay employment taxes. The payment system can be a bit confusing, so this article discusses how to go about depositing employment taxes with the IRS.Depositing Employment...
- Tax Fraud
What is tax fraud, and how does our government control it? That's a really big question to answer, so let's break it apart and answer it in two different paragraphs. Tax fraud is the intentional avoidance...
- Do You Need Life Insurance
It can be very difficult to decide if you need life insurance. Life insurance can be an extremely onerous financial commitment and investment, and it will also last for a considerable period of time, so...
- The History of the Internal Revenue Service
Do you ever wonder, how a country that revolted because of the unfair taxation of tea, came to be under the tight control of the Internal Revenue System? It seems kind of ironic, doesn't it, that the very...
- Highlights of IRS List of 2005 Tax Scams
Each year, the IRS lists various scams taxpayers get caught up in. The top 2005 scams include several that manipulate laws governing charitable groups, abuse credit counseling services or rely on refuted...
- Fraudulent Tax Shelters - KMPG Goes Down Hard
In the largest criminal tax case ever filed, KMPG has copped a plea to using fraudulent tax shelters to bilk the government out of 2.5 billion dollars. KMPG has agreed to pay a fine of $456 million dollars,...
- Do not let IRS make you Wait for the Wrong answer.
It's widely known that, if you hit a snag while doing your taxes you can call IRS for answers and you if you wait long enough you will get an answer, but is it the right answer?Quote: "Two years ago it...
- Refund Anticipation Loans -- More Harm than Help
If someone offered to give you a loan for $2100 at interest rates of up to 222 percent you'd probably laugh at them and walk away; but, this spring, 1 in 10 Americans will do just that: for the privilege...
| | |
