The guidelines that are in place from the IRS enable workers and business owners to claim for mileage as a business deduction if you are using your vehicle for business purposes. Some people who are employed are able to deduct business mileage if it is not reimbursed by employers or is only partially reimbursed at a rate that is lower than the official business mileage rate.
Owners of small businesses also often use their vehicles for business related purposes and in this event they too can claim their mileage as a business expense. However, it is important that no matter why or how you are claiming for your business mileage you are able to differentiate between business and personal use mileage and that you do not end up claiming for mileage clocked up when using your vehicle for personal use, as this could be classed as a fraudulent claim. On the other hand you don’t want to miss out and end up claiming for less mileage than you have actually done for business. For these reasons it is vital to ensure that you keep track of your business mileage.
The easiest way to keep track of your business mileage is to use your odometer, which will enable you to see how many miles you do from the start of your journey until the end, each time you go out for business purposes in your vehicle. You simply need to record the number of miles that you do either on a spreadsheet or even in a notebook that you use specifically for logging mileage. It is also advisable to make a note on your spreadsheet or notebook about why you had to make this trip, as this is information that the IRS may ask for. Write or log down where you traveled from and where you traveled to, detailing any detours that you may have made en-route for business purposes.
Of course, many people forget to check their odometer before they head out and therefore, unless they have made the same trip many times and already have a record of the number of miles done, it can become difficult to estimate your business mileage for that particular trip. However, you can simply use an online map and enter details of where you travelled from and to in order to get a good idea of the number of miles that you have done.
Andrew writes frequently about personal finance as well as issues effecting both consumers and small businesses, covering everything from savings to mortgages to
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At a party last week there started a discussion about the best places to live in the US. It quickly turned to matters of living in a pleasant climate with low cost of living as the group was primarily of the age about to reach retirement.
These friends were vigorously debating the virtues of living in a warm climate mostly to avoid the drudgery are dealing with winter temperatures and precipitation. Places like the Southwest and southern states dominated the conversation throughout.
If you are in the same age category as my friends and myself, there is a good chance you have considered this yourself. Statistics show that as the population ages and baby boomers reach retirement age more and more of them are choosing to move to the southern and southwestern United States.
It’s just too attractive an option when one no longer has the obligation of the job to be drawn to living in a place where the climate is primarily pleasant. Who wants to deal with snow and ice when another sunny day is a possibility?
If the move to a warmer climate is in your future, there are some tips that may help you decide which one is best. First set down in a quiet place with a pad and pen and begin by listing all your priorities. After you have listed them, place them in order of importance. This seems like a rather rudimentary task but one that is vitally important in any decision, especially when you are about to uproot your life and move to another part of the country.
The best places to live for you is not necessarily the best place for someone else but you can determine which place is preferred by using the exercise just described. Of course there are other considerations and you will no doubt want to visit each of the top choices that you come up with but finding your ideal location is not nearly as much of a challenge as it may first appear.
Choosing a retirement plan for your company can get very confusing. There are a lot of plans available today, each with their own pros and cons. If you are running a small business with a small group of employees or currently self-employed, then you would want a retirement plan that is easy to setup and flexible with contributions and fees. If these are the qualities that you want from a retirement plan, then consider getting a SEP IRA. But what is a SEP IRA?
A SEP is a retirement plan setup by employers for easy distribution of contributions for the employees. In this plan, only employers can make contributions. Employees on the other hand, are the ones who will setup their individual IRA plans.
A highlight of the SEP plan is its flexibility when it comes to contributions. An employer can choose whether or not he or she wants to make a contribution the SEP plan. The amount of the contribution to be given is also up to the employer. This no pressure setup is very beneficial for employers on a strict budget or profits that are not so favorable. If the business is not doing very well at this point in time, then an employer can choose not to contribute or lessen the amount that he or she wants to contribute. This allows the funds to be channeled to areas in the business where it can improve profits in the future.
If the business is doing well, then the high contribution limits (25% of employee’s annual compensation or $49,000 whichever is less) allows the employer to make big contributions to the SEP plan, to the benefit of the employees involved.
If flexibility is what you are looking for in a retirement plan, then a SEP IRA is one plan that you should consider. It gives a lot of freedom for employer’s contribution without sacrificing the benefits of the employees.
There have been a lot of changes in the past few years regarding the tax laws. One change includes the Job Creation Act of 2010, which was part of a package designed to help stimulate the economy into new growth. These changes affected the money people earned in 2011 with some of the affected areas being in worker’s gross pay and people’s pensions checks.
When creating new laws during the 2010 tax period there were also several credits that were cut including the making Work Pay credit. The various credits were extended to people who were actually employed during the year and not to those who were retired unless they had collected some form of income.
To help increase the amount of money an employed worker could take home the tax relief Act was created. This reduced the percentage of money that was taken out of a wage earner’s check for social security. This new act did not apply to people receiving pensions.
Even though the laws were created and placed into effect in 2010 they came so late in the year that they did not apply to the previous year’s taxable income. Most employees will not see the changes until they receive a paycheck in February of 2011.
Even though the amount of money withheld for social security will be less there will not be any changes made in other amounts withheld for services such as medicare.
For people receiving pension checks there usual allotment may be lowered depending on the plan used to calculate their amounts. The IRS has published several helpful guides for people who want to understand more about how these changes will affect the money they receive.
It is important for both retired individuals and those who are actively employed to review all of their financial statements pertaining to their withholdings every year to make sure they understand what changes pertain to them.