CPA Blog

Deduct all of the mileage you’re entitled to — but not more

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Published: Monday, 27 February 2017 09:06

Written by Phillip Strickler, CPA.CITP

Rather than keeping track of the actual cost of operating a vehicle, employees and self-employed taxpayers can use a standard mileage rate to compute their deduction related to using a vehicle for business. But you might also be able to deduct miles driven for other purposes, including medical, moving and charitable purposes.

What are the deduction rates?

The rates vary depending on the purpose and the year:

Business: 54 cents (2016), 53.5 cents (2017)

Medical: 19 cents (2016), 17 cents (2017)

Moving: 19 cents (2016), 17 cents (2017)

Charitable: 14 cents (2016 and 2017)

The business standard mileage rate is considerably higher than the medical, moving and charitable rates because the business rate contains a depreciation component. No depreciation is allowed for the medical, moving or charitable use of a vehicle.

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Proper education can drive retirement plan participation

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Published: Monday, 20 February 2017 08:35

Written by Phillip Strickler, CPA.CITP

Employers who offer retirement savings plans are already helping their workforces. But not all employees take advantage of these plans. And many who do still don’t contribute enough to retire comfortably. As a business owner, you can help your employees even more — and drive plan participation — by providing proper education on retirement planning.

Here are five ways to go:

1. Teach them about the general concepts of investing. Many employees are unfamiliar with basic economic and investing concepts. Offer instruction on concepts such as:

• Compounding growth,
• Tax implications of different types of savings plans, and
• How much they need to save to reach a certain sum at retirement.

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Do you need to file a 2016 gift tax return by April 18?

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Published: Monday, 20 February 2017 08:16

Written by Phillip Strickler, CPA.CITP

Last year you may have made significant gifts to your children, grandchildren or other heirs as part of your estate planning strategy. Or perhaps you just wanted to provide loved ones with some helpful financial support. Regardless of the reason for making a gift, it’s important to know under what circumstances you’re required to file a gift tax return.

Some transfers require a return even if you don’t owe tax. And sometimes it’s desirable to file a return even if it isn’t required.

When filing is required

Generally, you’ll need to file a gift tax return for 2016 if, during the tax year, you made gifts:

• That exceeded the $14,000-per-recipient gift tax annual exclusion (other than to your U.S. citizen spouse),
• That exceeded the $148,000 annual exclusion for gifts to a noncitizen spouse,
• That you wish to split with your spouse to take advantage of your combined $28,000 annual exclusions,
• To a Section 529 college savings plan for your child, grandchild or other loved one and wish to accelerate up to five years’ worth of annual exclusions ($70,000) into 2016,
• Of future interests — such as remainder interests in a trust — regardless of the amount, or
• Of jointly held or community property.

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Thinking big is the first step toward growing your business

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Published: Monday, 13 February 2017 08:57

Written by Phillip Strickler, CPA.CITP

Nearly every business owner wants to grow his or her company. But with growth comes risk, and that can keep you from taking the steps necessary to move forward. Yet if you don’t think big and come up with a long-term strategic plan, you’ll likely continue to spin your wheels.

Eyes on profits and value

Public companies answer to investors who consider earnings per share and stock price to be key indicators of their return on investment. Maximizing earnings is a short-term goal, but building value requires a long-term focus.

Many small to midsize businesses, however, have only their ownerships’ vision to motivate them. You also may have to operate much leaner, with more limited staff and overhead. In doing so, you may sacrifice value-building opportunities.

For example, a company that fails to invest in marketing may lose market share to a competitor that aggressively advertises and offers promotions. Or a business that hires managers only from within or chooses candidates based primarily on minimizing salary expense may lose out on the professional expertise that comes with a more seasoned management team.

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