Personal Finance
We are dedicated to keeping clients abreast of the latest developments and tax-saving strategies. This section includes a library of hundreds of timely articles about business, taxes, finances, trends and the like. The articles are categorized by subject matter, which can be accessed from the links. Click on your topic of interest and find a wealth of information.
WORK-RELATED EXPENSESThe deductibility of many work-related expenses is governed by special rules. These special rules apply to both employees and self-employed individuals. The following articles discuss some of the more commonly encountered situations.
Business Use of Your CarWhen you use a vehicle for business purposes, you can deduct the business portion of the operating expenses on your job or business. If you use it only for that purpose, you may deduct its entire cost of operation (subject to limits discussed later). However, if you use the car for both business and personal purposes, you may deduct only the cost of its business use. You can generally determine the expense for the business use of your car in one of two ways: the standard mileage rate method o...
When Business Property Must Be DepreciatedWhenever property is purchased for use in a business and that property has a useful life of more than one year, its cost must be deducted over its useful life. This accounting procedure is referred to as depreciation. The number of years the property must be depreciated is largely dependent upon the type of property it is, although sometimes the type of business in which it is used also determines its assigned life. However, there are exceptions to the depreciation requirement: Sec 179 Expens...
Mixing Business With PleasureIt is not coincidental that most conventions are held in resort areas during the spring through early fall months. Convention planners know quite well that convention timing and location is the key to its success. If planned properly, attendees can deduct a portion of the expenses for establishing business relationships and gaining business knowledge while enjoying a mini-vacation. Even without a convention, business travel can be married with some personal relaxation while still providing a ...
Deductions For Business TransportationHome to work - Generally, travel between home and work within a metropolitan area where the taxpayer normally lives and works is nondeductible commuting, even if the trip is made more than once a day. However, if a taxpayer travels to multiple work locations in a single day, the travel between the first and last work location is deductible travel. Another way to explain this rule is that the travel between home and the first work location of the day and final trip home from the last work loca...
Employee Use of a Home ComputerIf a taxpayer purchases a home computer for use in their work as an employee, they can claim a depreciation deduction if:1. Use of the home computer is for the convenience of the employer (that is, the taxpayer is required to use a computer on the job and the taxpayer's employer does not provide the employee with a computer), and2. Use of the home computer is required as a condition of the taxpayer's employment. To satisfy this requirement, there must be a clear showing that the employee cann...
Deducting Sales Tax On Business PurchasesWhen taxpayers buy new equipment for businesses purposes, the following question arises: "Can they separate the sales tax from the purchase price and deduct that separately as a currently deductible tax expense?" Unfortunately, you are required to include all the costs of acquiring the equipment into the depreciable basis, including the sales tax. Whenever property is purchased for business use in a business and that property has a useful life of more than one year, its cost must be deducted ...
Keeping Records for Out-of-Town Business Travel Out-of-town expenses are the ordinary and necessary expenses of traveling away from "home" overnight in pursuit of your employment, trade, or business. Your home is generally considered to be the entire city or general area where your principal place of business or employment is located. Out-of-town expenses include transportation, meals, lodging, tips, and miscellaneous items like laundry, valet, etc.Document away-from-home expenses by noting the date, destination, and business purpose of yo...
Lodging Expense Requires Substantiation Individuals who pay for lodging expenses while away from home on business can deduct these lodging expenses only if they are substantiated in full (record of time, place, amount, and business purpose, plus paid bills or receipts). The expenses can't be substantiated using the lodging component of the federal per-diem rate.IRS Revenue Procedures don't allow employees or self-employed individuals to use the federal lodging per diem rate to substantiate deductions for lodging expenses. For examp...
For Tax Purposes, Is It Better To Sell or Trade-in a Business Vehicle? It does make a difference for tax purposes if you sell or trade-in your business vehicle.Sell - If you sell it, you will incur either a taxable gain or loss, depending upon the amount you sell the business vehicle for less the undepreciated basis in the vehicle. As an example, suppose you sell your business vehicle for $1,000. Your original purchase price was $12,000, and you have taken $10,000 in depreciation leaving you with an undepreciated basis of $2,000. Subtract the $2,000 undepreciate...
Travel Deduction - Temporary Workplace For purposes of determining whether transportation between work and home is deductible, the IRS states that a temporary workplace is one where employment is expected to last one year or less. The following applies under the IRS definition:
Employment is temporary if it is realistically expected to last (and does last) for a year or less.
If employment at a location is expected to last for over a year, the employment isn't temporary, regardless of whether it actually exceeds one year.
If...