Beginning on Jan. 1, 2017, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be:
- 53.5 cents per mile for business miles driven, down from 54 cents for 2016
- 17 cents per mile driven for medical or moving purposes, down from 19 cents for 2016
- 14 cents per mile driven in service of charitable organizations
The business mileage rate decreased half a cent per mile and the medical and moving expense rates each dropped 2 cents per mile from 2016. The charitable rate is set by statute and remains unchanged. The standard mileage rate for business is based on an annual study of the fixed and variable costs of operating an automobile. The rate for medical and moving purposes is based on the variable costs.
Taxpayers always have the option of calculating the actual costs of using their vehicle rather than using the standard mileage rates.
A taxpayer may not use the business standard mileage rate for a vehicle after using any depreciation method under the Modified Accelerated Cost Recovery System (MACRS) or after claiming a Section 179 deduction for that vehicle. In addition, the business standard mileage rate cannot be used for more than four vehicles used simultaneously.
Source: Internal Revenue Service
contact@officetaxservices.com
(858)247-1680
Did you move due to a change in your job or business location? If so, you
may be able to deduct your moving expenses, except for meals. Here are the top
tax tips for moving expenses.
In order to deduct moving expenses, your move must meet three requirements:
- The move must closely
relate to the start of work. Generally, you can consider moving expenses
within one year of the date you start work at a new job location.
Additional rules apply to this requirement.
- Your move must meet the
distance test. Your new main job location must be at least 50 miles
farther from your old home than your previous job location. For example,
if your old job was three miles from your old home, your new job must be
at least 53 miles from your old home.
- You must meet the time
test.
After the move, you must work full-time at your new job for at least 39
weeks in the first year. If you’re self-employed, you must meet this test
and work full-time for a total of at least 78 weeks during the first two
years at your new job site. If your income tax return is due before you’ve
met this test, you can still deduct moving expenses if you expect to meet
it.
If you can claim this deduction, here are a few more tips from the
IRS:
- Travel. You can deduct
transportation and lodging expenses for yourself and household members
while moving from your old home to your new home. You cannot deduct your
travel meal costs.
- Household goods and
utilities.
You can deduct the cost of packing, crating and shipping your things. You
may be able to include the cost of storing and insuring these items while
in transit. You can deduct the cost of connecting or disconnecting
utilities.
- Nondeductible expenses. You cannot deduct
as moving expenses any part of the purchase price of your new home, the
cost of selling a home or the cost of entering into or breaking a lease.
- Reimbursed
expenses.
If your employer later pays you for the cost of a move that you deducted
on your tax return, you may need to include the payment as income. You
report any taxable amount on your tax return in the year you get the
payment.
- Address Change. When you move, be sure
to update your address with the IRS and the U.S. Post Office. To notify
the IRS file Form
8822, Change of Address.
Premium Tax Credit – Changes in Circumstances.
If you or anyone in your family purchased health coverage through the
Marketplace and had advance payments of the premium tax credit paid in advance
to your insurance company to lower your monthly premiums, it is important to
report life changes to the Marketplace when they happen. Moving to a new
address is one change you should report. Other things to report include changes
in your income, employment, family size, and gaining or losing eligibility for
other coverage. Reporting life changes as they happen allows the Marketplace to
adjust your advance credit payments. This will help you avoid a smaller refund
or unexpectedly owing taxes when you file your tax return.
Source: Internal Revenue Service
contact@officetaxservices.com
(858)247-1680
