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•July 2008

•Economic Stimulus Act of 2008

•April 2008

•Rebate Checks

•January 2008

•2007 Year-End Tax Legislation Alert

•October 2007

•2007 Year-End Tax Planning For Individuals

•July 2007

•2007 Business Travel

•April 2007

•2007 Planning - Standard Mileage Rates

•January 2007

•2005 Tax Legislation: Energy Act of 2005

•October 2006

•2006 YEAR-END TAX PLANNING

•July 2006

•Arranging Household Help - "Nanny Tax" Law

•April 2006

•Passive Activity Losses

•January 2006

•Paying the IRS - Planning to Pay Individual Estimated Tax

•October 2005

•Alternative Minimum Tax

•July 2005

•Business Trips That Mix Business with Pleasure

•April 2005

•Recordkeeping - Common Requirements for Business Income

•January 2005

•2004 Tax Legislation: Jobs Act - General Highlights

•October 2004

•Business Trips That Mix Business with Pleasure

•July 2004

•Keogh or SEP for the Self-Employed Person?

•April 2004

•Planning for 2003 IRA Contributions

•January 2004

•Hiring Your Spouse as an Employee

•October 2003

•Selling Investment Property - Like-Kind Exchanges

•July 2003

•Making Sure Entertainment Expenses Yield Deductions

•April 2003

•Sale of a Residence with a Home Office

•January 2003

•Exclusions on Sale or Exchange of a Principal Residence

Tax Tips

Tax Tips are provided by
Wood, Johnson, Heath, P.C.
8200 North Mopac, Suite 110, Austin, Texas 78759
Tel: 512-343-8075 - E-mail: info@wjh-cpa.com - Web: www.wjh-cpa.com
Certified Public Accountants, Financial Advisors, Management Consultants, Outsourced Service Provider

NOTE: The information in these tips is not intended to constitute legal, accounting, tax, investment, consulting, or other professional advice or services. For specific information that applies to your circumstances you should consult a qualified professional advisor.

April 2007
2007 PLANNING - STANDARD MILEAGE RATES FOR INDIVIDUALS

You may be wondering what you can do now to minimize your current year tax liability. If you incur costs in operating an automobile for business, charitable, medical, or moving purposes, you may be able to minimize your tax liability by claiming a deduction for the use of your automobile. If you have qualifying automobile expenses and if you opt to use the standard mileage rate in lieu of deducting actual expenses, you will want to make sure that you are using the correct standard mileage rates.

The standard mileage rates are based on an annual study of the fixed and variable costs of operating an automobile. Beginning January 1, 2006, the standard mileage rates for the use of a car (including vans, pickups, or panel trucks) are:

  • 44.5 cents per mile per mile for all business miles driven;
  • 18 cents per mile for all miles driven for medical or moving purposes; and
  • 14 cents per mile for all miles driven for charitable purposes.

Beginning January 1, 2007, the standard mileage rates for the use of a car (including vans, pickups, or panel trucks) are:

  • 48.5 cents per mile per mile for all business miles driven;
  • 20 cents per mile for all miles driven for medical or moving purposes; and
  • 14 cents per mile for all miles driven for charitable purposes.

Special rules apply to miles driven for charitable purposes related to Hurricane Katrina. For 2006, the rate for miles driven for charities providing Hurricane Katrina relief will be 32 cents per mile for deduction purposes and 44.5 cents per mile for reimbursement purposes. For the period August 25 to August 31, 2005, this was 29 cents for deduction purposes, and 40.5 cents for reimbursement purposes. For the months of September through December 2005, the special Katrina-related rates are 34 cents for deductions and 48.5 cents for reimbursements.

You may also be able to deduct parking fees, tolls, interest, and state and local taxes (other than gasoline taxes). Even though you are not required to substantiate expense amounts, you must substantiate other elements of time, place, and business purpose of the travel.

If you have any questions as to how these rules apply to your particular situation, please do not hesitate to call the Certified Public Accountants at Wood, Johnson, Heath, P.C. at 512-343-8075.

Wood, Johnson, Heath, P.C.