2017 Standard Mileage Rates

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Beginning on Jan. 1, 2017, the standard mileage rates for the use of a car, van, pickup or panel truck will be:

  • 53.5 cents per mile for business miles driven, down from 54 cents in 2016
  • 17 cents per mile driven for medical or moving purposes, down from 19 cents for 2016
  • 14 cents per mile driven in service of charitable organizations

The business mileage rate decreased half a cent per mile and the medical and moving expense rates each dropped 2 cents per mile from 2016. The charitable rate is set by statute and remains unchanged.

For self-employed business owners, interest expense paid on the car loan is also deductible, above and beyond the standard mileage rate.

Parking and tolls are always separately deductible.

The standard mileage rate for business is based on an annual study of the fixed and variable costs of operating an automobile, including depreciation, insurance, repairs, tires, maintenance, gas and oil. The rate for medical and moving purposes is based on the variable costs, such as gas and oil.

 

CP301 Notice from IRS

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If you receive a CP301 Notice from the IRS, it means that you have set up online access with the IRS.  If you did NOT do that, then you must call the IRS immediately at 1-888-841-4648 to DISABLE THE ONLINE ACCESS account.

The IRS online access was hacked about two months ago, so the IRS disabled the ability to get transcripts of your income tax return information downloaded through the online access account.  However, a transcript can still be ordered this way, and it will come to you by snail mail to your address of record.

There are now only two other reasons for setting up the Online Access account with the IRS: to set up a payment plan or to get a PIN to e-file your tax return.  This second reason, to get a PIN to e-file your tax return, is the PROBLEM right now.  It means someone else can e-file a fake tax return in your name and claim refunds for direct deposit into an account that probably won’t exist later when the fake tax return is discovered.

So if you receive this CP301 Notice of setting up an online services account with the IRS, and you did not do so, IMMEDIATELY call the IRS and get the account disabled.  Unfortunately, it will take at least 45 minutes on hold to get through to the IRS as they do not have enough staff to cover such calls.

The Age of Misinformation!

CAUTION!  We’ve gone from the age of information to the age of MISINFORMATION! 

I have been told that this blog appears with advertising.  I do not allow ads to appear in this blog, and never will.  At first I thought there are hackers who have managed to invade the blog and make these ads appear.  I have since found out that WordPress is now resorting to extortion in seeking a “No Ads Upgrade” by placing porn ads on my blog.

Please be assured that if you see any advertising here on this blog, it is WordPress doing so to make money for WordPress.   I only receive a free blog hosting.  I do not place ads.  I do not receive compensation for ads.  Proceed with caution!

Nothing is FREE, especially INSURANCE and INVESTMENT “PRODUCTS”!

I subscribe to a lot of financial industry emails to keep up with the latest sales tactics that some so called “financial advisors” use to separate taxpayers from their hard earned money.  In today’s inbox is this ad:

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A SIMPLE PRESENTATION USING THIS OPTICAL ILLUSION (and an optical illusion is pictured) IS MAKING ADVISORS $30,000, $40,000 AND $50,000 A MONTH

How?

Simple. This new product is easy to sell for 2 reasons:
1. It instantly doubles your client’s:
• Growth
• Income
• Safety
• All with no additional taxes
2. And you don’t have to move a single cent of their money… leave it right where it’s at (imagine making $6,000 commission without having to move a penny of your client’s portfolio)!

This new product has already been reviewed by FINRA is 100% compliant with all BD’s and Insurance companies… and is selling itself during 1-call closes (why wouldn’t it, looking at the 2 reasons above)?

If you get in front of people before your competition… this will be the easiest sale of your life.

Learn how it’s done in a 50-minute presentation by the creator of the product and presentation and get ready to be rocked. These types of opportunities only come around in the financial industry every 10 years or so… and they are dynasty makers.”

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As my Dad used to say in the fishing tackle business, you first have to catch the fisherman before your lure has a chance to catch any fish.   With this kind of advertising to the financial advisors who sell you “investment” products, you will find some advisors will be looking out for their own interests first.  Someone has to pay for that $6,000 commission, and you can be certain that if you buy whatever this investment product claims to be, that $6,000 will be coming out of your pocket.   You won’t see that because it is an OPTICAL ILLUSION!

Education Credit “Years”

Most high schoolers graduate in June, and then if attending post-secondary classes, they start that Fall with the first half of their freshman year.  A 4 year college degree therefore can span 5 tax years.

The American Opportunity Credit, which replaced the Hope Credit, is only available for 4 TAX YEARS and is available only for the first 4 years of postsecondary education.  There is a difference in what each of these “years” means.

If a student started in the Fall semester of 2006, and then continued through 2007, 2008, 2009, graduating in the Spring of 2010 (or anytime in 2010), we’ve just spanned 5 tax years.  However, we’ve only spanned 4 years of postsecondary education – Freshman, Sophmore, Junior and Senior years.  Do you see the difference?

If the Tuition Deduction were claimed in any of those years, then the Hope Credit or American Opportunity Credit were not claimed, because you can’t claim both in the same year.  The Tuition Deduction was extended through December 31, 2010 with the latest round of tax changes signed into law in late December 2010. 

Therefore, if the student has completed only 3.5 years of postsecondary education (not yet completed 4) and hasn’t used all 4 TAX YEARS of either the Hope or American Opportunity Credits before 2010 (by virtue of using the Tuition Deduction in one or more of those intervening years), then you can take the American Opportunity Credit for 2010. 

See IRS Publication 970 for all of the details on Education Credits and the Tuition Deduction.  http://www.irs.gov/pub/irs-pdf/p970.pdf , especially pages 8 and 12 for discussion on the definition of “years” and page 13 for the flowchart to see if the student is eligible.