TAX TIP OF THE WEEK

Paying taxes may be a simple concept, but the complexity of tax laws creates confusion and often leads one to pay more than they should. The professionals at the Office of Debra R. Schill, CPA think you should only pay your fair share in taxes, and hope that providing the following information, you might find it useful in your tax planning.

Please bookmark this page and stop back often, as a new tax tip is added every week!

2008 standard mileage rates released

If you use the IRS standard mileage rate to reimburse yourself or your employees for the business use of personal automobiles, it's time to update your calculation. Beginning January 1, 2008, the new rate for business driving is 50.5¢ a mile.

The standard rate takes the place of costs such as gas, oil, depreciation, licenses, maintenance, and tires. In most cases you can use the standard amount instead of keeping records of actual expenses. (If you're self-employed, you may want to track both mileage and expenses to determine which gives you a bigger deduction at year-end.)

Remember to save receipts for parking fees and tolls, since they're not included in the standard rate and can by deducted in addition to the mileage rate. You'll also need to maintain a log showing the dates you use your car, truck, or van for business, where you go and the purpose of each trip. In addition, take time now to note your beginning-of-the-year odometer reading. That will make it easier to track the total miles you drive this year.

Another change to mileage rates: For 2008, the amount for deductible medical and moving mileage has been reduced to 19¢ a mile.

The rate for the charitable use of your vehicle remains the same at 14¢ per mile driven during 2008.

Here's a comparative summary of the standard rates per mile:

For answers to your questions about recordkeeping requirements and maximizing vehicle expense deductions, please give us a call.

Stop back next week for a new TAX TIP!

Don't forget to check out our tax articles section to find information on your area of interest!