Weekly Tax Brief
Could you save more by deducting state and local sales taxes?
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- Published: 08 February 2016 08 February 2016
For the last several years, taxpayers have been allowed to take an itemized deduction for state and local sales taxes in lieu of state and local income taxes. This break can be valuable to those residing in states with no or low income taxes or who purchase major items, such as a car or boat. But it had expired December 31, 2014. Now the Protecting Americans from Tax Hikes Act of 2015 (PATH Act) has made the break permanent.
So see if you can save more by deducting sales tax on your 2015 return. Don’t worry — you don’t have to have receipts documenting all of the sales tax you actually paid during the year to take full advantage of the deduction. Your deduction can be determined by using an IRS sales tax calculator that will base the deduction on your income and the sales tax rates in your locale plus the tax you actually paid on certain major purchases.
© 2016
Extension means businesses can take bonus depreciation on their 2015 returns – but should they?
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- Published: 01 February 2016 01 February 2016
Bonus depreciation allows businesses to recover the costs of depreciable property more quickly by claiming additional first-year depreciation for qualified assets. The Protecting Americans from Tax Hikes Act of 2015 (the PATH Act) extended 50% bonus depreciation through 2017.
The break had expired December 31, 2014, for most assets. So the PATH Act may give you a tax-saving opportunity for 2015 you wouldn’t otherwise have had. Many businesses will benefit from claiming this break on their 2015 returns. But you might save more tax in the long run if you forgo it.
What assets are eligible
For 2015, new tangible property with a recovery period of 20 years or less (such as office furniture and equipment) qualifies for bonus depreciation. So does off-the-shelf computer software, water utility property and qualified leasehold-improvement property.
President Obama has signed the Protecting Americans from Tax Hikes Act of 2015.
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- Published: 21 January 2016 21 January 2016
Several tax breaks have been made permanent such as the Research Tax Credit, Section 179 Expensing of $500,000, Charitable Distributions from IRA for individuals age 70 ½ or over, Child Tax Credit, American Opportunity Tax Credit, and the State & Local Sales Tax Deduction.
The Act renews some provisions through only 2016 such as the Qualified Tuition & Fees deduction, and Mortgage Debt Exclusi...
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IRS Announced 2016 Standard Mileage Rates for Business, Medical and Moving
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- Published: 21 January 2016 21 January 2016
Beginning on Jan. 1, 2016, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be:
- 54 cents per mile for business miles driven, down from 57.5 cents for 2015
- 19 cents per mile driven for medical or moving purposes, down from 23 cents for 2015
- 14 cents per mile driven in service of charitable organizations
