By topic: Cars SUVs Pickups

Updated 2021 Tax Resource Guide; Download Now

Download this newly updated two-page guide so that you have a handy desktop reference with the 2021 corporate and individual tax rates, estate tax rates, self-employed tax rates, Social Security and Medicare tax rates, capital gain rates, standard mileage rates, standard deductions, luxury auto depreciation limits, and select retirement and IRA limits.

14 Tax Reduction Strategies for the Self-Employed

Inside this article, you’ll find the 14 tax reduction strategies for the self-employed that we identified for you last month. But here you find more—links to the articles so that you have the nuts and bolts of implementing the strategies.

IRS Audit Issue: SUV Built on Car Chassis

When is an SUV a car, and when is it a truck? How big is the difference in deductions? Does the SUV built on a car chassis get different treatment from the SUV built on a truck chassis?

Know These Four Magic Business Mileage Rules

Learn these four business mileage rules. With them, you have a roadmap to the best tax benefits. And if you ever suffer an IRS audit, these four rules will save your bacon.

Download Your New 2021 Desktop Reference Guide Now

Download this two-page guide so that you have a handy desktop reference with the 2021 corporate and individual tax rates, estate tax rates, self-employed tax rates, Social Security and Medicare tax rates, capital gain rates, standard mileage rates, standard deductions, luxury auto depreciation limits, and select retirement and IRA limits.

2020 Last-Minute Vehicle Purchases to Save on Taxes

Here’s an easy question: Do you need more 2020 tax deductions? If yes, continue on. Next easy question: Do you need a replacement business vehicle? If yes, you can simultaneously solve or mitigate both the first problem (needing more deductions) and the second problem (needing a replacement vehicle), but you need to get your vehicle in service on or before December 31, 2020. This article helps you find the right vehicle for the deduction you desire.

 

2020 Last-Minute Year-End Tax Deductions for Existing Vehicles

Yes, December 31 is just around the corner. That’s your last day to find tax deductions available from your existing business and personal (yes, personal) vehicles that you can use to cut your 2020 taxes. In this article, you will learn how to find and release tax deductions that the tax code trapped inside your existing business cars, SUVs, trucks, and vans. And you will learn how the Tax Cuts and Jobs Act makes it possible for you to find a big deduction from your existing personal vehicle.

The Insurmountable Sin in an IRS Audit: A True and Sad Story

Do you have a mileage log that will survive an IRS audit? If so, good for you! If not, get ready to give up all (not some, but all) of your vehicle tax deductions for not just one year but three years, as you will see in this true story.

TCJA: Don’t Lose Out When Corp. Vehicle Is in Your Personal Name

Do you operate your business as a corporation but use a vehicle that you own in your personal name for the corporate business? If so, be aware that the TCJA changed the rules of the road for tax years 2018-2025. To avoid losing your rightful deductions, you need to have the corporation reimburse you for business use, as we describe here.

Don’t Let Section 179 Recapture Hurt You

Your claim to Section 179 expensing comes with strings. You make a deal with the government to keep your business use above 50 percent during the depreciation periods for the assets that you expensed. If you violate your agreement, and depending on when you do that, the government can show up and recapture a big chunk of your Section 179 expensing.

What Is the Unpardonable Sin in an IRS Audit?

If you or your corporation is unlucky enough to face an IRS audit, there is one record that stands out as critical to your audit health. If you are missing this one record, the IRS examiner knows that he or she should quickly expand to other areas of your tax return.

Case Study: Trade-In on a New SUV—Reimbursement by Corporation

Do you operate your business as a corporation but own your business vehicle personally? If yes, what happens when you trade your existing personal vehicle for a replacement personal vehicle and then have the corporation reimburse you for the newly purchased personal vehicle? There are nuances that you need to know, as we explain in this article.

2019 Last-Minute Section 199A Strategies That Reduce Taxes, Too

Remember to consider your Section 199A deduction in your year-end tax planning. If you don’t, you could end up with a big fat $0 for your deduction amount. We’ll review three year-end moves that (a) reduce your income taxes and (b) boost your Section 199A deduction at the same time.

2019 Last-Minute Year-End Tax Deductions for Existing Vehicles

Yes, December 31 is just around the corner. That’s your last day to find tax deductions available from your existing business and personal (yes, personal) vehicles that you can use to cut your 2019 taxes. In this article, you will learn how to find and release tax deductions that the tax code trapped inside your existing business cars, SUVs, trucks, and vans. And you will learn how the Tax Cuts and Jobs Act makes it possible for you to find a big deduction from your existing personal vehicle.

2019 Last-Minute Vehicle Purchases to Save on Taxes

Here’s an easy question: Do you need more 2019 tax deductions? If yes, continue on. Next easy question: Do you need a replacement business vehicle? If yes, you can simultaneously solve or mitigate both the first problem (needing more deductions) and the second problem (needing a replacement vehicle), but you need to get your vehicle in service on or before December 31, 2019. This article helps you find the right vehicle for the deduction you desire.

10 Proven Tax Reduction Strategies for the Self-Employed

We took a deep dive into the 263 strategy articles that apply to the self-employed and pulled out 10 that you should spend time with.

Q&A: The IRS Audit Is Wrong on First-and-Last-Stop Rule

In this IRS examination, the examiner mistakenly applied the first-and-last-stop business commuting rule. We explain what the IRS got wrong and what documents can be used to overturn the IRS’s decision.

Q&A: Can the IRS Require Odometer Readings with the Mileage Rate?

What proof of mileage do I need if I’m using the IRS standard mileage method? Can the IRS require me to provide odometer readings as proof?

TCJA Allows Bonus Depreciation on Purchase of Leased Vehicle

Good news, bad news! Bad news: as in prior years, buying the vehicle you lease destroys any opportunity to claim Section 179 expensing. Good news: the TCJA added two new provisions that now allow you to claim bonus depreciation on the purchase of a vehicle that you lease.

Tax Deduction for Classic or Antique Cars Used in Business

How does the tax law treat the classic or antique car when you use it for business? Can you deduct it just as you would any car you use in business? Learn how some tax law changes enabled the classic or antique car as a business asset and why that can work to your advantage.

When the Second Office in the Home Is a Principal Place of Business

If you have an office downtown where you spend 40 hours a week, can you claim that you have an office in your home that qualifies as a principal office if you spend only 12 hours a week working in the home office? If you said no, you are not alone. But you would also be wrong, as we explain in this article.

TCJA One Way to Deduct Personal Vehicle Used for Corporate Business

If you operate your business as a corporation but own the business car personally, you have no vehicle deduction possibility without corporate reimbursement, because the Tax Cuts and Jobs Act does not allow employee business expenses for years 2018 through 2025.

Section 179 Deduction: When Your Vehicle Lease Is Not a Lease

Is your lease a lease? Are you sure? There are lots of funny rules that make what looks like a lease a purchase—and make what looks like a conditional sales agreement a lease. This article shows you what happened to Arthur Boyce and gives you a number of tips to help you avoid his plight.

For You: New Downloadable Home-Office Deduction Topic Guide

For most business owners, the home office not only produces business deductions for a percentage of personal home expenses but also can create a substantial increase in business vehicle deductions.

2018 Last-Minute Vehicle Purchases to Save on Taxes

Here’s an easy question: Do you need more 2018 tax deductions? If yes, continue on. Next easy question: Do you need a replacement business vehicle? If yes, you can simultaneously solve or mitigate both the first problem of needing more deductions and the second problem of needing a replacement vehicle, but you need to get your deduction in place on or before December 31, 2018. This article helps you find the right vehicle for the deduction you desire.

2018 Last-Minute Year-End Tax Deductions for Existing Vehicles

Yes, December 31 is just around the corner. That’s your last day to find tax deductions for your existing business vehicles that will cut your 2018 taxes. In this article, you will learn how to find and release tax deductions that the tax code trapped inside your existing business cars, SUVs, trucks, and vans.

2018 Last-Minute Section 199A Strategies

Starting now, this year (2018), you have to consider your Section 199A deduction in your year-end tax planning. If you don’t, you could end up with a big fat $0 for your deduction amount. We’ll review four year-end moves that (a) reduce your income taxes and (b) boost your Section 199A deduction at the same time.

Drive Time Increases Odds of Deducting Rental Property Losses

Your rental properties provide tax shelter when you can deduct your losses against your other income. One step to deducting the losses is to pass the tax code’s 750-hour test. One step to finding the hours you need may be your drive time.

Q&A: Car Interest and Corporate Reimbursements

Say you operate your business as an S corporation and the S corporation reimburses you for your business use of your personal vehicle. If you have a loan on the personal vehicle, can your S corporation reimburse the business portion of the interest tax-free to you as it can with other reimbursed employee expenses? Find the answer in this article.

Reasonable Mileage

The law contains no reasonableness test for mileage. There are very specific rules for recording mileage. We recommend that you keep a mileage log for at least three consecutive months to prove your business-mile percentage.

Q&A: 10 Proven Strategies to Lower S Corporation Taxes

Here’s a link to a resource that gives you 10 proven strategies to lower S corporation taxes.

Q&A: Guide to Published TCJA Tax Reform Articles

Here’s a resource guide that gives you the Tax Cuts and Jobs Act tax reform articles published at the Bradford Tax Institute from January 1 through July 31, 2018, including for each article the (a) topic, (b) code section, (c) prior law, (d) new law, and (e) link.

TCJA: Convert Personal Vehicle to Business and Deduct up to 100%

Tax reform under the Tax Cuts and Jobs Act gives you bonus depreciation and favorable rules for converting your personal vehicle and other assets to business use. On the conversion, you can immediately qualify to deduct up to 100 percent of today’s fair market value on your existing personal vehicle.

Q&A: IRS Auditor Doesn’t Know the 90-Day Mileage Log Rule

You cannot expect IRS auditors and agents to know the tax code and regulations. If you can produce the code or regulations that authorize your deductions, you are miles ahead in your audit.

Danger: Your Personal Home Is Not Your Tax Home

Depending on how you operate your business and where it’s located, the federal income tax terms “personal home” and “tax home” can have a big impact on your business vehicle deductions. And then there’s the difference between the federal income tax terms “business travel” and “business transportation” and how one very beneficial rule applies when you are inside the area of your tax home.

Tax Reform Allows Bigger, Faster Business Car Deductions

Finally, lawmakers did the right thing by increasing the luxury auto depreciation limits on business cars. The old luxury limits were unrealistic, punitive, unfair, and discriminatory against any car that cost more than about $15,000. The new limits don’t create parity in all respects, but they are a big improvement.

Tax Reform Eliminates Tax Benefits of Business Vehicle Trade-Ins

Tax reform no longer allows Section 1031 exchanges on personal property such as your business vehicle. The trade-in was the most common 1031 exchange of a business vehicle. Now, because of tax reform, the vehicle trade-in is simply the sale of the old vehicle to the dealer and the purchase of a new vehicle. The sale to the dealer creates gain or loss on the sale just as it would on an outright sale.

Business Mileage: Beware of IRS Assertions of Metropolitan Area

The business mileage rules can get tricky, and this is especially true if you drive both inside and outside your metropolitan area. This metropolitan area is not what you think it is. The IRS and the courts have created special confusion about your metropolitan area.

Q&A: 33 Last-Minute Tips to Save on Your 2017 Taxes

If you are looking for some last-minute tips to save on your 2017 federal income taxes, this article has what you need.

Don’t Let IRS Mileage Rules Destroy Your Vehicle Deductions

What percentage of your business vehicles would you (or your business) like to deduct? To achieve your desired percentage, you need to know and apply the rules that the IRS applies to the mileage that you drive from your home to various business destinations.

Abandoned by Tax Advisor, Taxpayer Wins IRS Audit

The woman in this audit learned how tax knowledge can turn what appears as a nightmare (an IRS audit) into a positive happening—meaning cash refunds for the year of the audit and subsequent years. As the old saying goes, “knowledge is power.”

Find New Deductions with Two-Car Tax Strategies

If you have two or more vehicles in your family, you might find added tax deductions by driving more than one vehicle for business. To know if you benefit or not, you need to put your numbers into our magic two-car formula. This is very easy to do, and the formula result tells you for sure whether you come out ahead or not.

Q&A: Administrative Home Office Is a Principal Office

The special rule that applies to administrative or management use of the home office creates a principal office. There are only two ways to create a principal office in your home. The administrative or management office works when you have two offices: (1) an office in the home and (b) an office outside the home.

Two-Car Tax-Deduction Strategy Approved by the IRS and the Courts

When the two-vehicle tax-deduction strategy works for you, you find new deductions without spending a penny or driving a mile farther. In this article, you find that both the IRS and the courts approve of your use of two or more vehicles for business.

Heavy Vehicle + Deductible Home Office = Major Tax Savings

As a small-business taxpayer, you likely have control of your business. With control, you can do much to increase your tax benefits with a qualifying heavy vehicle and a certain type of office in your home. So, if you’re looking for some major tax savings this year, you will find a path to them in this article.

Q&A: Store S Corporation Vehicle in Owner’s Personal Garage?

 

The TWO Times to Avoid the 1031 Exchange

The Section 1031 exchange is a great tax planning strategy when you are using it to your benefit. But there are two times when you need to avoid the 1031 exchange so as to come out money ahead. The first is pretty apparent, but it does catch many taxpayers by surprise. The second requires thought and knowledge, as you learn in this article.

New in Business? Avoid These Two Tragic Vehicle Deduction Errors

If you are new in business, your vehicle deductions can prove problematic because you likely do not know what tax records you need. And without the right records, you arrive at your tax preparer’s office hoping for a miracle that’s not going to happen.

Are You Cheating Yourself by Using IRS Mileage Rates?

If you qualify to use IRS mileage rates to deduct your vehicle, you need to know if you are cheating yourself with the method you select. The good news is, this article includes a tool that will give the one best method for your deduction and also tell you how much after-tax cash you pocket with that method.

Does the IRS Mileage Rate Cost You Deductions on a Leased Vehicle?

Are you going to lease your next business vehicle? Are you eligible to use IRS mileage rates? If so, both the IRS and the leasing company are going to give you rules to ponder and expenses to consider before you select your tax-deduction method—either the IRS mileage rate or the actual expense method.

Avoid Lost Deductions When Corp. Vehicle Is in Your Personal Name

Do you operate your business as a corporation but own the vehicle you use for the corporate business in your personal name? If so, to avoid losing your rightful deductions, you need to have the corporation reimburse you for business use. The corporation can use one of two methods for the reimbursement.

Secret Cash Inside the IRS Standard Mileage Rate

Mileage-rate addicts usually think that the mileage rate takes care of everything—then they cost themselves money by failing to deduct a loss on the sale of a business vehicle.

Q&A: Switch from Mileage Rate to Actual Expense Method

 

Q&A: Who Should Own the Business Car: Corporation or Individual?

 

2016 Last-Minute Vehicle Purchases to Save on Taxes

Here’s an easy question: Do you need more 2016 tax deductions? If yes, continue on. Next easy question: Do you need a replacement business vehicle? If yes, you can solve or mitigate the first problem of needing more deductions and solve the second problem of needing a replacement vehicle at the same time, but you need to read this article now so you know what you have to do and when you have to do it.

2016 Last-Minute Year-End Tax Deductions for Existing Vehicles

Yes, December 31 is just around the corner. That’s your last day to find tax deductions for your vehicles that will cut your 2016 taxes. And with our existing high tax rates, 2016 is a good year to cut your taxes. In this article, you can find and release tax deductions that the tax code trapped inside your existing business and personal cars, SUVs, trucks, and vans.

2016 Last-Minute Business Motor Home Purchase

A business motor home could provide both big tax deductions and an ideal solution to your business lodging and transportation needs. You would know how clean your sleeping room is. You would know the room’s smoking history. You would know how many pets, if any, have graced the premises.

Q&A: IRS Allows Switch from IRS Mileage Rate to Actual Expenses

 

Q&A: Biggest 2016 Vehicle Deductions

 

Is the New 54-Cent IRS Mileage Rate a Rip-Off or Does It Help You?

To know if you are money ahead deducting your business vehicle using the IRS mileage rate or the actual-expense method, you need to use our magic calculator. Tax software used by tax professionals and consumers compares the first-year deductions only, and because of the wide variation in first-year deductions caused by the luxury vehicle limits, bonus depreciation, and Section 179 expensing, the first-year-only comparison is going to produce inaccurate results.

Beware When Gifting Business Property

You need to know, and avoid, tax-problem surprises when you gift business property to your parents, children, or others. With the wrong method, you can toss tax-deduction benefits into the trash. You can easily suffer recapture. Don’t let your gift of business property surprise you and take money out of your bank account.

Will Tax Law Destroy Your Business Vehicle Donation to Charity?

There are many reasons why you may want to donate your business vehicle to charity, not the least of which is that you’re helping a worthy cause. But if your goal is to couple that good deed with a nice tax deduction, make sure you do the math before you hand over the keys to avoid suffering an unpleasant tax surprise.

Tips for Best Tax Result on Vehicle Disposition

The sale or trade-in of a business vehicle has positive or negative tax ramifications. You have a choice in this matter. But first you need to know the dollar amount of your gain or loss. This article gives you the six steps to finding your gain or loss.

Tax Audit Tips for Entertainment and Vehicle Deductions

Special documentation rules apply to entertainment and vehicles. One rule requires you to document your vehicle mileage within one week. Another rule says you don’t need receipts if the vehicle or entertainment expenditure is less than $75. This no-receipt rule can be hazardous to your deductions. It also does not relieve you from using the right documentation to prove the expenses.

Tax Tips for 1031 Exchange of a Porsche Cayenne for a Car

Follow these three easy steps to an IRS audit-proof tax-deferred Section 1031 exchange of your SUV for a car.

Q&A: Two More Reasons to NOT Rent Equipment to Your Corporation

 

Rent Equipment to Your Corporation; Qualify for Section 179 Expensing

Renting equipment to your corporation requires knowledge of the tax laws. If you as a non-corporate lessor want Section 179 expensing, you need to comply with three special rules. If you can’t comply, you may obtain the benefits of Section 179 in other ways as we explain or simply stay with the rental without using Section 179.

How to Deduct Your Business Motor Home

Your business motor home is either a lodging facility, like a hotel, or a transportation vehicle. As a vehicle, it can qualify for Section 179 expensing, but you likely want to avoid that and take the easy road with MACRS depreciation.

Tax Tips for Avoiding Section 179 Recapture

Your claim to Section 179 expensing comes with strings. You make a deal with the government to keep your business use above 50 percent during the depreciation periods for the assets that you expensed. Should you violate your agreement, and depending on when you did that, the government can show up and recapture a big chunk of your Section 179 expensing.

1031 Tax Program for Vehicles

Did you get big tax deductions using Section 179 expensing and/or bonus depreciation on your vehicle purchases in 2012, 2013, 2014, and/or 2015? If so, you now have a vehicle with a low adjusted basis. That gives you a tax problem when you sell the vehicle. To lessen and possibly eliminate the problem, use a Section 1031 tax-deferred exchange.

Q&A: IRS Mileage Rate Kills Amending for Section 179 Deductions

 

2015 Last-Minute Year-End Tax Deductions for Existing Vehicles

Yes, December 31 is just around the corner. That’s likely your last day for finding tax deductions to cut your 2015 taxes. And with our existing high tax rates, 2015 is a good year to cut your taxes. In this article, you can find and release tax deductions that the tax code trapped inside your existing business and personal cars, SUVs, trucks, and vans.

2015 Last-Minute Business Motor Home Purchase

A business motor home could provide both big tax deductions and an ideal solution to your business lodging and transportation needs. You would know how clean your sleeping room is. You would know the room’s smoking and no-smoking history. You would know how many pets, if any, have graced the premises.

2015 Last-Minute Vehicle Purchases to Save on Taxes

Here’s an easy question: Do you need more 2015 tax deductions? If yes, continue on. Next easy question: Do you need a replacement business vehicle? If yes, you can solve or mitigate the first problem and solve the second problem at the same time, but you need to read this article now so you know what you have to do, when to do it, and what you might want to wait for before doing it.

Don’t Make These Mistakes When You Convert Business Property to Personal Use

You need to know the tax rules before you convert business property to personal use. You don’t want the recapture surprise. You don’t want the tear-jerking missed tax deduction. With a little tax knowledge, you can avoid both the surprise and the tears.

Want a Big Deduction for Your New Vehicle? Here’s Good News

Lawmakers have yet to decide if they will retroactively enact bonus depreciation and the higher Section 179 expensing limits for 2015 purchases. But if you’re looking to buy a large SUV or truck for your business, you may be surprised to learn how fast you can write off the full cost of the vehicle even if lawmakers fail to extend the tax breaks. Knowing the write-offs may entice you to pull the trigger on that purchase immediately instead of waiting for changes in the law.

Unlock the Deductions Trapped in Your Personal Assets When You Convert Them to Business Use

Tax law gives you several nice tax-saving strategies for your business assets but not many for your personal assets. So what happens when you convert a personal asset to a business asset? Does the personal taint last forever? No! This conversion opens the door to a world of new deductions.

Don’t Lose a Penny of Your Mileage Deduction: Defend It with Simple, Inexpensive Apps and GPS Tools

Don’t Put Your S Corporation Vehicle Title in the Wrong Name! It Could Cost You Thousands in Tax Deductions

Don’t Let Expense Report Blunders Trigger Unnecessary Taxes, Punishing You and Your Employees

If you reimburse your employees for business expenses, or if you operate your business as an S or a C corporation, it’s crucial that you know and follow the IRS accountable plan rules—this will save money not only for you but also for your employees. We’ll give you two easy-to-use tools that will help you seamlessly incorporate these rules into your business routine.

Don’t Overlook the New Law That Allows Section 179 and Bonus Depreciation Retroactively to 2014

Lawmakers did it again. They retroactively reinstated a number of so-called extender laws, including those tax-favored Section 179 expensing and bonus depreciation deductions. Did you buy vehicles and equipment last year? If so, this new law can make you smile, as this article shows it did for Harry Spencer.

Stop Taxes before They Happen by Shrewdly Planning the Trade-In or Sale of Your Business Vehicle

Before you sell or trade your business vehicle, take a minute to think. The actions you take now could come back to haunt you at tax time. You could be creating extra tax for yourself or missing out on tax losses that you could use to offset other income. We’ll tell you what you need to know to be sure you make the right decision.

Your Daily Commute Is Not Deductible—Unless You Do One of These Three Things

Your trip from home to the office each day certainly feels like part of your workday, but it’s not—at least according to the IRS. Unless you fall into certain exceptions, your commute creates personal mileage, which is not deductible. But there’s a solution, and it’s so easy that if you don’t do it, you’re simply giving money to the government that you could keep for yourself.

Your Car Is a Tax-Savings Machine: Rev It Up Using These Smart “IRS-Proof” Guidelines

The IRS is more than happy to take away your deductions for your vehicle’s operating expenses if you do not follow their perfectionistic standard of record keeping. But you can beat them at their own game. This article shows you the easy way to satisfy even the most demanding of IRS agents when it comes to proving the usage of your business vehicle.

4 Ways to Turn Your Cars, SUVs, Trucks, and Vans into More Profitable Tax Deductions

December 31 is just around the corner. That’s likely your cutoff date for finding tax deductions that will cut your 2014 taxes. And remember, your 2014 taxes are the highest they’ve been in 28 years. This article helps you identify tax deductions embedded in your existing business and personal cars, SUVs, trucks, and vans.

7 Tax-Reducing Cars, Trucks, Vans, and SUVs to Buy Before Year-End

It’s November. It’s also the beginning of year-end tax planning time. And for many business owners, it’s car, truck, van, and SUV buying time. The combination of car, truck, van, and SUV buying time and year-end tax planning can help you make a sizable dent in your 2014 tax burden. And if lawmakers get their act together, they could further increase your tax benefits before December 31.

Should You Gamble on a Big Motor Home Deduction This Year?

You can use a motor home for your business. If you are thinking of buying a motor home at this time, your Section 179 expensing election is somewhat in limbo. It’s possible that lawmakers will reinstate last year’s limits on Section 179 expensing. This article examines the gamble you take if you buy before lawmakers take action or if they fail to reinstate last year’s limits.

Ignore the Tax Code’s Rules on Receipts

There is one part of tax law that you should ignore. It will get you into trouble. If you read the literal language of the tax code, you might get the impression that receipts are not always necessary. Don’t fall into this trap. Make it a general habit to keep your receipts and you will make your tax life much, much easier.

How to Increase Vehicle Tax Deductions without Spending a Penny

When you own a business, you should look at all possible assets that you own personally and how you might use them to increase your business deductions. This is particularly true for vehicles. And the beauty of identifying assets such as personal vehicles that you can use for business is that you don’t spend money to create deductions. You simply use assets you already own.

IRS Asserts Fraud and Crushes Failed Mileage Log

You need basic books and records to avoid trouble with the IRS. If you have inadequate books and records and also make a large cash deposit in the bank, you might visit with the IRS every two weeks for about a year as the taxpayers in this case did. That’s a lot of unpleasant face time with an IRS agent.

Three Often Overlooked Tax Deductions When You Lease a Vehicle

Lease or buy? That’s the question you often face when you want to replace your business vehicle. To help you get maximum tax-deduction benefits should you decide to lease, examine the three often overlooked tax deductions in this article.

How Berge Earned Business Deductions on Trips to See His Parents

If you drive 36 miles to your parents’ home but spend time that day doing business research in the library around the corner from your parents’ home, are those 36 miles business or personal miles? They could be business miles. You need two types of proof: (1) library proof and (2) vehicle proof. How would you prove that you used the library? How would you prove that you drove the miles?

Tax Deductions for Personal Car Used for S Corporation Business

Let’s say you operate your business as an S corporation but use a personal car for corporate business. To create the proper tax deductions, the right way to handle this situation is for the S corporation to reimburse you using one of two tax law-approved methods.

10 Last-Minute Tax Deductions for Business Vehicles

Your tax-benefit time for your business and personal vehicles is running out on December 31. If you are going to do something, do it now. This article gives you 10 year-end tax-benefit strategies for replacing or adding a business vehicle.

Test Your Tax IQ: Gain on Sale—Create Tax Benefits

You likely have a handle on how the acquisition of a new asset is going to give you tax benefits. But have you considered the asset you are replacing? Your first step with the asset that’s going good-bye is to see whether you have a gain or loss. If you have a loss, see last month’s article. If you have a gain, take this short test to make sure you are getting maximum tax benefits.

How to W-2 the Vehicle You Provide to an Employee

You provide your employees with an automobile for business use. You know that their personal use of the vehicle must be included in their wages, but how do you calculate that amount? What valuation rules are available? This article tells you what your choices are and how to apply them.

Test Your Tax IQ: Realizing Tax Benefits of a Loss Deduction

Let’s say that you calculate a tax loss on the sale of your business vehicle. Tax law gives you tax benefits from a valid tax-loss deduction. But you need to make the right move to realize those tax benefits. And when it’s time to dispose of your old business vehicle, you have a number of choices, only one of which will produce immediate tax benefits for you.

Impact of Death, Retirement, and Disability on the 179 Deduction

Have you purchased vehicles for use in your business? Did you take a 179 deduction for them? What happens to your deduction if you retire or become disabled before the end of the vehicle’s useful life? What if you die? This article gives you what you need to know.

Court Denies Tax Deductions for Motorhome and Two Business Cars

Say the IRS sent you one of those lovely letters that says: “Come on down and bring your tax records with you.” How would your tax records hold up in an IRS audit? That’s a scary question. You need to make sure that you have this one tax record in good shape when you appear for an audit. Mr. Dunford, the subject of this article, failed that one record and it cost him plenty.

Tax Treatment of Vehicles Provided for Employees

Have you considered providing your employee with an automobile? Would that automobile be used by the employee for business purposes or personal purposes? The tax effect for the employee depends on the answers to that question. This article gives you what you need to know.

Shedding Doubts about the Home-Office Tax Deduction

Are you timid about claiming your rightful home-office deductions, especially when you have a business location outside your home? You’re not alone. This article addresses the rule that causes much misinformation and worry. Join us as we dispel this home-office deduction doubt!

Bank Is Not a Work Location for Commuting Rules

Does stopping at the bank create business miles and eliminate personal miles? Is the bank a business stop for purposes of the temporary stop rules? This article explains the mileage rules that apply when you drive to the bank.

Danger: Your Personal Home Is Not Your Tax Home

Depending on how you operate your business and where it’s located, the federal income tax terms “personal home” and “tax home” can have a big impact on your business vehicle deductions. And then there’s the difference between the federal income tax terms “business travel” and “business transportation” and how one rule applies when you are inside the area of your tax home.

Test Your Tax IQ: Home-Office Tax Deduction with Regular Office

You can’t claim a home-office deduction if you also have a second location for your business outside the home. Right? Wrong!!! Here’s why.

Ouch! Vehicle Totaled! Tax Benefits to Know

If you wreck your business vehicle, you will like the involuntary conversion rules that allow you to defer any taxable gain, providing you replace the vehicle within two years. This is true regardless of how you operate your business, corporation, or proprietorship.

How Your S Corporation Gets Tax Deductions for the Corporate Car

Do you operate your business as a corporation? Does the corporation own the business car? Do you drive the corporate-owned car or other vehicle for personal purposes? If so, you need to know how the IRS treats your personal use and what that personal use does to the corporate tax deductions.

Maximum First-Year Tax Deduction on a Business Vehicle

How much of a vehicle deduction do you want from your business-vehicle purchase? A lot? A little? Could lawmakers trip you up in your desires? Absolutely. There are big differences in what you can deduct, depending on whether you buy a pickup truck, SUV, or car. Further, the differences among the categories depend on the weight of the vehicles. You need to know what the differences are if you are going to get the vehicle deduction you want.

How to Maximize Tax Deductions on New Business-Vehicle Leases

You may be leaving thousands and even tens of thousands of dollars in unclaimed tax deductions on the table if you traded in a vehicle you owned on the lease of a business vehicle. Here’s a look at why the money gets left on the table. It’s a simple matter of thinking that this was a trade. For tax purposes, it was not a trade. And that’s usually good for your pocketbook.

Trap to Avoid: Leasing When You Thought You Were Buying—or Vice Versa

Once you decide whether to buy or lease your business vehicle, you need to ensure that the actual transaction you enter into is the one you intended. It’s not simply a matter of what you call it. The actual terms of the agreement must make it a “true lease” or a purchase. If the IRS finds that the lease is not a lease or that a purchase is not a purchase, the IRS re-characterizes the transaction, charges you additional taxes, and then hits you with hefty penalties.

Test Your Tax IQ: Deducting More than One Business Vehicle

This article contains a short quiz that will help you understand when you can gain tax deductions by using more than one vehicle for business. You will see what the IRS has to say about driving more than one vehicle, how the mileage log works when you drive more than one vehicle, and what it takes to make this pay off for you.

Tax Deductions for Mileage to Rental Properties

How do you treat a trip from your home to your rental property? Does the trip produce deductible mileage? Or is the trip a personal commute? If it’s a personal commute, what could you do about it?

Buy or Lease a Business Vehicle: Which Costs Less?

Although personal considerations come into play, the choice between buying and leasing a vehicle for your business ultimately boils down to cost. So it’s essential to understand how to compute and compare the costs and to have the right tools to make those computations easy. This article gives you what you need.

Buy or Lease: 10 Tax and Money Factors That Decide

Buy or lease? That is the question you must answer when you acquire a new vehicle for your business. Unfortunately, like most business owners, you may simply not know the right way to weigh the options. Result: You could end up paying more than you should and/or miss out on glorious tax savings. Here’s what you need to know to ensure this doesn’t happen.

Avoid the Section 179 Gotcha When Renting Equipment to Your Corporation

If possible, you want to take money from your corporation in some form other than salaries and wages, on which you pay payroll taxes. One such tactic, the lease of Section 179 personal property to your corporation, can accomplish this, but it rubs against one big gotcha and two steep hurdles. This article shows you how to avoid the gotcha, avoid the hurdles, and get the result you want.

Tax Deduction for Classic Car Used in Business

How does the tax law treat the classic car when you use it for business? Can you deduct it just as you would any car you use in business? Learn how some tax law changes enabled the classic car as a business asset and why that can work to your advantage.

Tax Loss Trapped by Trade-In of Business Car

As a subscriber, you likely remember that the trade of a business car for another business car is a Section 1031 exchange. Most businesspeople and real estate investors use the 1031 exchange to avoid paying taxes on the profits that would exist if the asset had been sold outright. In this article, you see how poor Mr. Bird made a $47,000 tax loss not deductible because he used Section 1031 when he traded in his old car on a new car.

New 2013 IRS Standard Mileage Rates

The IRS just released the new 2013 standard mileage rates. For business purposes, you can use the standard mileage rates in lieu of actual expenses for depreciation and operating expenses of the vehicle. It’s different for charity, medical, and moving mileage. Here, the rate is in lieu of “out of pocket” operating expenses only.

9 Year-End Business Vehicle Tax Tips

If you want to do something with your business vehicles this year, you don’t have much time left. This article gives you the year-end strategies you need to ensure maximum tax benefits should you decide to replace or add a business vehicle.

You Can Switch from the IRS Mileage Rate to the Actual-Expense Method

Are you currently using IRS mileage rates to deduct your business vehicle? Is that the right choice for you? If not, you will be happy to know that you can switch to the actual expense method. The IRS gives you two different ways to do the switch, depending on when you want to make the switch.

Taxman Says Stop at the Bank to Eliminate Commuting—Wrong

Have you ever wondered what you can do to eliminate commuting mileage? Perhaps you received some advice on how to do this. Was the advice correct? In this article, a tax preparer told a physician that she could deduct her mileage to her regular office if she simply stopped at the bank every day. Unfortunately, this advice is wrong.

How Would Your Mileage Log Stand Up to an IRS Audit?

Your mileage log may not be an estimate of mileage. Further, you need a mileage log that proves mileage. With a weak, suspicious, or error-filled mileage log, by law, neither the IRS nor the courts may give you any vehicle deductions—and we mean none, not a penny.

How to Deduct Travel by Car, Train, Plane, or Boat

You have a wide variety of choices on how to travel for business. You can use a car, train, plane, or boat. You can fly economy, business, or first class. Should you own a plane, you can use it for business travel. Special rules apply to the plane, boat, and car; accordingly, if you travel for your business, you should know the rules in this article.

IRS Audit Defense Insurance Fails Totally

Doing your taxes yourself using tax preparation software is dangerous business. You might realize the danger up front and decide that you need some type of audit defense or representation insurance in case of an IRS audit. And then, once the audit commences and you engage your audit defense team, find yourself in the soup like the couple in this article.

Do You Have These Four Tax-Deductible Business Mileage Questions?

Here are four answers to questions you might have regarding your business mileage, such as how to treat mileage from an administrative office in the home to yoga and then to your downtown office. Or how would you treat mileage to a Lions, Rotary, or Shriners meeting or activity? This article gives you both ideas and answers.

Increase Tax Deductions by Knowing the Business Mileage Rules

Whether you use the IRS mileage method or actual expense method, you need to know business and personal miles. Business miles either increase your deduction directly or increase your percentage for the actual expense method. Regardless of your choice of entity, incorporated or not, this article gives you one sure way to increase business miles and reduce personal miles.

Section 179 Deduction Lost When Truck Purchase Was a Lease

Is your lease a lease? Are you sure? There are lots of funny rules that make what looks like a lease, a purchase—and what looks like a conditional sales agreement, a lease. This article shows you what happened to Arthur Boyce and gives you a number of tips to help you avoid his plight.

16 Tax Deduction Targets to Increase Your Business Car, SUV, Truck, and Van Deductions

This article has 16 tax-deduction targets that you can use to increase your business car, SUV, truck, and van deductions. You don’t need to buy any new vehicles to get the benefits. You simply need the knowledge as laid out here.

Last-Minute Tax Planning for Business Vehicles

Okay, it’s December and you have some last-minute tax planning to take care of. This article helps you identify big last-minute tax deductions for bonus depreciation and Section 179 expensing on business cars, trucks, vans, and motor homes, including those you already own and may or may not use for business.

IRS Agrees That You Should Ignore Truck Chassis for Section 179 Expensing Deductions

The chassis of an SUV, truck, or van does not define its status for tax purposes. In other words, the truck chassis does not make that SUV a truck. Similarly, the car chassis does not make that SUV a car. If you want to use Section 179 expensing on your SUV, you need to know what makes the SUV a truck or a car.

Tax Guide to Best 2011 Business Vehicle Tax Deductions

Tax law requires your attention to enable tax deductions on your business vehicles. Your tax write-off results differ with certain aspects: vehicle type (car, van, pickup truck, crossover vehicle), new or used, use of Section 179 expensing, and bonus depreciation. This article guides you through the deductions so you can select what gives you the best write-offs.

Find New Tax Deductions with Two-Car Tax Strategies

Learn the basics of the two-car tax-deduction strategy and then, best of all, use the magic formula calculator to see if you increase or decrease your tax deductions with this strategy.

Is the New IRS Mileage Rate a Rip-Off or Does It Improve Your Deductions?

The IRS mileage rate can produce misleading results. Often the new person in business wrongfully thinks that the IRS standard mileage rate overcomes the need for a mileage log. This article contains a magic calculator and gives you the ins and outs of what you need to know to ensure that you are picking the best after-tax cash result for your business vehicle.

How the IRS and Courts Have Approved the Two-Car Tax-Deduction Strategy

When the two-car tax-deduction strategy works for you, you find new deductions without spending a penny or driving a mile farther. In this article, you find that both the IRS and the courts approve of your two-car tax deductions.

New: Big Bonus Depreciation Break Applies to Trade-Ins

The new 100 percent bonus depreciation enables new tax planning strategies, as it applies to both the carryover and boot basis on a trade-in or other Section 1031 exchange.

New Law Inadvertently Kills Business Car Depreciation; IRS Rescues Deductions with a Safe-Harbor Escape

How often do you say, “Thank goodness for the IRS?” Well, you are going to say that when you see how the IRS saves the bacon when you claim the recently enacted 100 percent bonus depreciation on your business car.

Tax Tips for Divorce (Part 1)

You have at least three parties in your divorce: you, your soon-to-be ex, and your Uncle Sam. Yes, as with almost everything, there are tax consequences to a divorce. This article puts you on a path that will help you protect your money and your assets.

IRS Releases 2011 Luxury Auto Limits

Tax law limits depreciation deductions on cars, trucks, and vans that don’t qualify for Section 179 expensing. The IRS updates the limits each year for inflation. This article explains how the limits work and gives you a link to the 2011 revenue procedure that contains all limits for both purchased and leased cars, trucks, and vans.

Tax Tip: With the New Tax Law, What’s Best—IRS Mileage Rates or Actual Expenses?

The new tax law contains some real surprises when it comes to deducting vehicles. In some cases, you can deduct the full cost in the year you place the vehicle in service. In other cases, the luxury auto limits might stretch your depreciation deductions over 30 or more years.

IRS Mileage Rate Kills Section 179 1040X

You can amend your Section 179 deduction. However, when you chose IRS mileage rates, tax law grants you no Section 179 deduction and no ability to amend your tax return to claim it. You can recover many of those missed deductions by switching to the actual expense method as described in this article.

Nine 2010 Last-Minute Tax Tips for Vehicles

This issue contains 21 last-minute tax tips that you can use for 2010. We’ve broken the tips into two articles: one for vehicles and one not related to vehicles. This article contains the tips that apply to vehicles.

New Law: Another Small-Business Economic Stimulus Package for You

The Small Business Jobs Act of 2010 spends $12 billion on small businesses, hoping to add a little stimulus to this economy. Make sure you are getting your fair share of this stimulation.

Tips for Best Tax Result on Vehicle Disposition

The sale or trade-in of a business vehicle has positive or negative tax ramifications. You have a choice in this matter. But first you need to know your gain or loss. This article gives you the six steps to finding your gain or loss.

Tax Tip for Business Car When Incorporated

Here are your only two tax-saving choices when you operate your business as a corporation but personally own the car you use for business.

Trade-Ins of Business Cars Can Create Big Tax Deductions

The trade-in of your old business car on a replacement car creates additional basis. The subsequent trade-in can also increase basis. This process can create a big tax deduction if you know what to do.

Tax Savings Trap Crushes S Corporation Owner’s Expenses

Poor planning for the S corporation owner’s business expenses can cost the owner every penny of his deductions.

Don’t Let the New 2010 Luxury Vehicle Depreciation Limits Hurt Your Deductions

Luxury limits on passenger automobiles and light trucks and vans produce planning benefits at the back end. If you want to beat the luxury limits, you have to buy a vehicle that’s exempt from the luxury limits.

What Is the Unpardonable Sin in an IRS Audit?

Should you or your corporation be unlucky enough to face an IRS audit, there is one record that stands out as critical to your audit health. If you are missing this one record, the IRS audit can quickly expand to other areas of your tax return.

IRS Mileage Rate for 2010—Good or Bad Deal?

Would Section 179 expensing make the IRS rates a bad deal for you? How about leasing or the luxury limits? Know for sure when you use the analyzer that comes with this article.

Secret Cash Found in IRS Mileage Rates

IRS mileage rates contain a depreciation surprise for many taxpayers. The depreciation might be hiding cash that can be yours with a simple strategy.

How the No-Receipt-Under-$75 Tax Rule Works

The no-receipt-under-$75 tax rule applies only to certain travel, entertainment and listed property.

Transient Rule Applied to Business Motor Home

This article shows you how to apply the transient rule to use of a motor home for business purposes. By passing the transient test, your motor home can qualify for Section 179 expensing to the extent of business use.

IRS Expands Break for Section 1031 Exchanges of Business Vehicles

Wow! This new IRS private ruling expands the number and types of like-kind vehicles available for Section 1031 exchanges.

No Mileage Log on Business Truck Destroys $53,625 Section 179 Deduction

You need a mileage log on your business vehicle. With no mileage log, you can try the alternate-proof method, but the odds are better than 9 to 1 that you will lose. This article gives you a perfect mileage-log system free.

IRS Refund Owed after IRS Audit

The woman in this audit learned how knowledge can turn what appears as a nightmare (an IRS audit) into a positive happening—meaning cash refunds for the year of the audit and subsequent years. As the old sayings goes, “knowledge is power.”

Tax Deduction on Sale of Business Car

Learn how to calculate the tax deduction when you sell your business car at a loss—the most likely result.

Increase Federal Tax Rebates with More Business Mileage

Learn the federal income tax rules on business mileage to increase vehicle deductions. The four questions and answers in this article give you a clear roadmap of the rules along with the strategies you need to pocket more cash from your business.

Home Office Deduction—Show Me the Proof!

Show me the proof that I can have an office in my home when I have an office downtown! Have you ever wanted that proof? This article gives you the law, legislative history, and IRS authorization for the office in the home deduction.

Federal Tax Deductions for Three Business Cars

This article empathically answers the “show me where it says that you can use three cars for business” question.

S Corporation Setup Destroys Tax Savings

You may not claim a home office deduction when you rent your home office to your S corporation employer. Therefore, redo this arrangement by taking advantage of your employee status.

Business Furniture in the Home

You do not need a tax deductible office in your home to deduct the cost of business furniture and equipment in your home

How the 2009 Stimulus Package Can Stimulate Your Business Deductions

The official name of the new stimulus is the American Recovery and Reinvestment Act of 2009 (Public Law 111-5). Like last year’s version, the 2009 stimulus contains three big deals for business: (1) fifty percent bonus depreciation; (2) Section 179 expensing of up to $250,000; and (3) an increase in first-year luxury car depreciation on new (not used) cars.

Make Your 2009 Stimulus Tax Savings Permanent with a Section 1031 Exchange

The tax-favored like-kind rules for personal property such as cars contain a number of twists. For example, trading a car for an SUV, a crossover vehicle, or another car qualifies as a like-kind trade. But the trade of a car for a pickup truck is not like-kind.

The One Time to Avoid the 1031 Exchange

The very first thing you need to do once you make the decision to buy the new asset and replace the old asset is to calculate your taxable gain or deductible loss on the old asset (as if you were going to sell it right now). The result—gain or loss—determines the strategy you should follow.

Section 179: Avoid These Three Things

When you claim a Section 179 expensing deduction, you make a deal with the government. You agree to give back your early tax benefits if, during the recapture period, your business use drops to 50 percent or less.

Applying the Luxury Vehicle Limits

Your maximum write off on a new $14,000 car purchased in 2008 is $10,960. To get to this number, you need to use Section 179 expensing. Should you have personal use of the car, then you reduce your $10,960 limit by your personal use.

Tips to Audit-Proof Your Records

The law gives you no choice but to keep the proper tax records on a timely basis. This is pretty easy when you know what to do. One easy rule to follow is to never commingle your activities in your bank accounts. Both the rule that requires a mileage log and the rule that requires a time log are more difficult, but absolutely essential to proving your deductions.

20 Last-Minute Tax-Planning Tips for 2008

As the end of the year arrives, you still have time to pocket some tax money. The 20 strategies in this article have a wide range, from getting married to selling your old vehicle. Spend a few minutes and pick up some last minute tips.

Section 179 on a Pickup Truck

The section 179 deduction can allow a write-off of up to $250,000 on a Toyota Tundra truck. The big write offs are easy to lose if the truck is not kept and used correctly and for the appropriate amount of time.

2009 IRS Standard Mileage Rates Released

The IRS has issued the 2009 standard mileage rates that self-employed taxpayers and employees may use for deductions in the use of business cars, vans, pickups, and panel trucks.

Your Business Stimulus Expires Soon

Take advantage of the government stimulus package in 2008. You need to buy and place in service a business vehicle, business equipment, or a business-related building before the end of the year. Generate fifty percent bonus depreciation, up to $250,000 Section 179 expensing, or an $8,000 increase in first-year luxury car depreciation.

Court Rules Records Adequate for Mileage-Rate Deductions

Learn about Gary Larson’s legal fight to deduct his business gas mileage. His logs ended up satisfying the court, but you can do better to avoid what he went through – by keeping good records! Also, take a look at Tax Diary System. This training tutorial gives excellent tax record-keeping tips, whether or not you use this system.

No Expensing Allowed on Purchase of Leased SUV

Buying the vehicle you lease destroys any opportunity to claim Section 179 expensing.

Deductible Business Expenses: Wins Computer, Loses Mileage Write-Off

In court, David Choe succeeded proving that his laptop was business use, but a bad mileage log took away all his automobile deductions. Ouch! Learn how to avoid this egregious error.

Cohan Estimates Useless for Most Small Businesses

Gone are the days of estimating deductions for expenses. Today, you need better tax records than ever. We give you a chart to help you avoid common mistakes, and to see what you need and why you need it.

Deductions When You Turn In Your Leased Vehicle

Are you turning in a leased vehicle? For the business use of the vehicle, you can deduct excess mileage charge and the early termination fees.

Court Recaptures Section 179 Deductions

Learn from Michael Birdsill’s mistakes: keep good records of your business vehicle use, and report it on your taxes. Birdsill’s court case proves that you must do this to receive deductions for mileage. Follow our four rules for claiming Section 179 expensing to make sure you do it right.

Fix for Charity Mileage Rate?

Lawmakers finally let the IRS deal with deducting charitable mileage! The IRS annually updates its deduction rates for mileage, but lawmakers haven’t updated their charitable mileage rate since 1997. Read how a new law applies the IRS rates for charitable mileage, and how this affects you.

Turbo Tax Error Corrected

When using tax preparation software, be alert to automatic calculations that could place improper amounts on your tax returns.

Increase Deductions with More Business Mileage

Pay attention to the rules on what makes a business mile and what makes a personal mile so that you can achieve the best possible vehicle deductions.

IRS Increases 2008 Mileage Rate to 58.5 Cents

The new IRS mileage rates give you an extra $1.60 per gallon. Does this mean that gas prices will go higher? Also, don’t forget to log your mileage correctly to get those deductions.

The IRS Mileage Rate Checklist

The IRS standard mileage rates might save you more money in lieu of actual expenses. Note, though, that there are important details regarding who qualifies, what the mileage rate includes. Also, there are a number of common pitfalls to avoid.

Find Hidden Deductions When You Trade In Your Vehicle on a Lease

The trade of a vehicle on a lease is not a like-kind exchange. It is more like a cash sale, which has its benefits. You can get big deductions if you do it right.

SUV Recapture

You can avoid recapture with a Section 1031 deferred exchange or a delayed exchange. You can also make your Section 1031 deferred exchange strategy forever, making your deductions permanent.

1031 Exchange to Avoid Recapture

If you sell an asset, you should know the details about depreciation and Section 179 expensing. You can sell or trade, and choose if you want an intermediary. The result: you could save a lot of money.

Court Gives Roadmap to Vehicle Logs

Learn from one couple’s court case: keep good records! It’s easy, but important. Follow our strategy to make sure you don’t miss a critical element.

Zero Interest on Car Loan

There is no such thing as zero interest for tax purposes.

How the New Law Stimulates Your Business

This could be the perfect year to buy that rental property or building for your office. The new 50 percent bonus depreciation, new $250,000 expensing limit, and new higher luxury limit make 2008 the year to seriously consider making business purchases.

How a Buy-and-Sell Strategy Combined with Section 179 Expensing Can Put Self-Employment Tax Dollars in Your Pocket

You can take advantage of Section 179 expensing to put money in your pocket! By working the tax law, you can arrange your business assets to decrease your self-employment tax and save money.

Don’t Do the Worst Thing You Can Do to Your New Vehicle Deductions

Don’t blow your deduction – use your vehicle more than 50% for business. If you don’t, you must recapture Section 179 deductions and recapture MACRS deductions. Aim gun, shoot foot.

Gift of Business SUV

When a business vehicle is given away as a personal gift, it is subject to recapture on any expensing or depreciation deductions in excess of straight-line depreciation.

 

Quitting Business

When you claim Section 179 expensing or MACRS depreciation, you make a contract with the government. When you quit your business, you probably violate the terms of your tax-law contract and, thereby, trigger recaptures taxes.

 

Standard Mileage Rate 50.5 Cents for 2008: Gift or Rip-Off?

Compare IRS rates with actual expenses to find what’s best for you. Should you choose IRS mileage rates, keep this one key point in mind: when you sell, you have gain or loss to consider. You might save thousands and thousands by knowing this one simple rule.

Bad Mileage Log Kills Vehicle Deductions

Robert Walters’ auto deductions sank from $10,878 to $966 because of poor record keeping. Do the best thing you can do for yourself. Keep a good mileage log next to your appointments. This can be easy, and it will save your bacon if you get audited.

15 Last-Minute Tax Planning Tips for 2007

You have very little time left to impact your 2007 taxes. Here is a meat-and-potatoes list of last-minute opportunities.

Get Your SUV Deduction on the Right Tax Form

Getting your numbers on the right tax forms is critical to properly filing your tax return and claiming your money. This means that you need to pick a preparer who knows what he or she is doing, and you need to know enough yourself to know that your preparer is right.

No Mileage Log, No Deduction

Again, Colvin fails to provide sufficient evidence for his deductions. This time, it’s a $6,000 auto deduction, for which he was denied all but $780.

$25,000 Expensing of SUV

If your SUV qualifies as a truck, you can write off up to $25,000. What qualifies as a truck, however, is very specific. It must pass the weight test, be a legal gas-guzzler. The bed size is important, too.

Goodbye, SUV Expensing?

The $25,000 SUV expensing might disappear in 2008. We won’t speculate on what might happen next year, but the current rules still apply until the end of 2007.

Make Sure the New 2007 Business Vehicle Luxury Limits Don’t Stick It to You

The government penalizes you if you drive a luxury vehicle. Further, the government’s idea of luxury and the reality do not match.

Expense Allowances Can Be Dangerous

Save yourself time and trouble. Reimburse employees for actual expenses. Forget those two troublemakers: per diems and allowances.

Tax Quiz—IRS Audit

4% of Americans are audited each year. Do you know what two line-item expenses are most vulnerable to a Schedule C audit? Take our quiz and find out!

Getting More Vehicle Deductions

We help one business owner plan her vehicle purchases. She uses her husband’s car on occasion, and wants to purchase a new SUV for her business. We give information both on the larger-scale, and specific to her case.

MLM Deductions Lost

Yung Chong worked a full-time regular job, and had a Section C side business. His records, while present were not enough to satisfy the court, which disallowed all of his nearly $10,000 in deductions for his side business. This case makes it clear: even if you have some records, if you do not have all the required records, you get no deductions.

Reimbursement of Mileage for 105 Plan

For employees under the Section 105 Medical Plan, the law authorizes a medical deduction for transportation to receive medical care. You may reimburse any medical expense that you could otherwise deduct on your Form 1040.

Car Deduction

To calculate the deductions for a business vehicle when you sell it, you must divide the car into business and personal parts, find your adjusted basis for business purposes, and find your loss deduction.

Reimburse S Corporation Owner for Section 179 Deduction

If you personally own the vehicle that your corporation uses, the IRS authorizes the reimbursement of the vehicle expenses. To make this work, you must submit an expense report and mileage log to your corporation.

Tax Lawyer Fails Deductions

William Lenihan, a well-educated tax lawyer, lost every deduction he claimed on both his Schedule C consulting business and his Schedule E rental businesses because he did not keep good records. Know the law! Keep good records!

Reasonable Mileage

The law contains no reasonableness test for mileage. There are very specific rules for recording mileage. We recommend that you keep a mileage log for three consecutive months to prove your business-mile percentage.

Subaru Outback As a Truck

There are very specific regulations regarding what qualifies as an SUV for the $25,000 expensing. Does a Subaru Outback qualify?

Lack of Proper Records Crushes Deductions

Section 274 is merciless. You need a mileage log and the required elements that prove your overnight stays. Having your CPA prepare these records after the fact fails.

IRS Sets 2007 Mileage Rate at 48.5 Cents

As an individual (not as a corporation), you may use IRS mileage rates in lieu of actual expenses to deduct vehicles you own or lease. The IRS rate has two components: one for operating expenses and the other for depreciation.

Unibody SUV

You may amend your tax return for missed Section 179 expensing on a unibody SUV. The truck chassis is not required for an SUV to qualify as a truck for purposes of the SUV deduction.

Does the SUV Built on a Unibody Frame Qualify for $25,000 Expensing?

You may Section 179 expense up to $25,000 of your business cost when you buy a more than 6,000 pound gross vehicle weight rated (GVWR) new or used crossover vehicle or SUV built not on a truck chassis, but on a unibody frame in a manner that qualifies the vehicle as a truck for purposes of the gas guzzler tax.

The Back-End Vehicle Deduction Tax Reduction Plan

You need a tax plan for the sale or trade-in of the business vehicle you are driving today. You also need a tax plan for the business vehicle that will replace your current business vehicle. You need this tax plan if you use IRS mileage rates, actual expenses, Section 179 expensing, MACRS depreciation, or bonus depreciation.

Sign on Car

Advertising your business on your vehicle does not change either your business or personal use of the car.

Business Trumps Medical Mileage

Good tax planning for a trip to the medical doctor includes making a properly-targeted business stop the primary purpose of the trip.

1031 Exchange of SUV for Hybrid Car

The SUV is like-kind property to the hybrid car. Thus, you can trade or use an intermediary to complete a Section 1031 tax-deferred exchange of an SUV for a hybrid car.

Upside Down Trade of SUV

You apply the new trade-in adjustment rule to find your new depreciable basis. When you have the combination of an expensed asset and an upside down loan balance, you can generally ignore your personal use and follow the cash outlay to your new basis.

Heavy SUVs Still Tax Favored

Tax law continues to favor the heavy SUV over the typical passenger automobile. The heavy SUV qualifies for additional first-year expensing of up to $25,000 and it’s exempt from the gas guzzler tax.

Woe to the Taxpayer with Bad Records

Bad records can cost you just about every tax deduction. You can testify as to your deductions, but without the records that turns out worthless. When it comes to your taxes, paper talks.

Filing Returns for Past Years

Not filing your tax returns on time because you lost or misplaced your tax records is going to make your tax life miserable. The trouble is so bad that you need to consider an “offer in compromise.”

Winning the Combined Business- and Personal-Trip Deduction

This taxpayer won his deduction for going to the library located 36 miles away from his home and next to his parent’s home. The IRS lost its argument that the taxpayer should have used the library near his home rather than drive 36 miles to the library where he also could visit with his parents.

Best Strategy for SUV Saves Self-Employment Taxes

Say you are going to buy a replacement SUV that qualifies for Section 179 expensing. Should you trade your old vehicle or sell it outright? The selling outright strategy can save self-employment taxes. Many Schedule C taxpayers pocket thousands with this little-known strategy.

Personal Car Used for Corporate Business

When you operate your business as a corporation, you need to reimburse the business use of the personal car as a reimbursed employee expense. The corporation may use either the IRS mileage method or the actual expense method for the corporate reimbursement to the employee-owner.

Pyramid Scheme Costs Deductions

When you start a new business activity or you do a business activity on the side, you must establish a profit motive. One easy way to demonstrate the profit motive is to show the time you spend on the activity. This taxpayer had no proof of time worked, so he looked suspicious to the court.

Trade-In of Car on Lease

The trade of a car on a lease is not a like-kind exchange. This is a sale of the old car and a lease of the new car. The sale part gives you a gain or a loss. In addition, the sale part generates a prepayment on the lease where you benefit with an amortization deduction.

Bad Records Destroy Deductions

The law requires the taxpayer to maintain records sufficient to establish his income and deductions. In select circumstances, estimates provide a rational basis for deductions. With respect to vehicle, entertainment, meals, travel, and gifts; estimates are out and neither the court nor the IRS may grant your deductions without the prescribed records.

New 2006 Standard Mileage Rates

You probably should hate the IRS for the mileage rate. First, the mileage rate creates the illusion that you don’t need a mileage log (wrong!). Second, individuals who start in business think that the mileage rate makes their tax life easy and that it doesn’t make much difference financially (generally, wrong). Third, mileage-rate addicts think that the mileage rate takes care of everything—then they cost themselves money by failing to deduct a loss on the sale of a business vehicle and overlook the business person’s tax deduction for interest on a car loan.

Fake 1099 on Auto Purchase Creates Trouble

The auto dealer sent this customer a bogus 1099 because the customer refused to return to the dealership and redo the “no interest” loan to an interest bearing loan. The dealer made a mistake originally and then wanted the customer to help fix the problem—at the customer’s expense. The customer said, “No.” Later, when the bogus 1099 showing interest income from the no-interest loan showed up in this customer’s mailbox, the customer took this dealership problem to the IRS.

Van Donation Valued at Sale Price, Not Blue Book or Appraised Value

The IRS told lawmakers that a number of people were cheating on vehicle donations and that some changes in the rules could put a quick stop to that. This court case explains why lawmakers went along with the IRS and enacted the changes that are in effect today.

$75 Rule on Vehicles

Under tax law, your vehicle is considered “listed property.” The IRS has a regulation that applies the $75 receipt rule to listed property.