A slightly lower IRS mileage rate means smaller tax deductions for business miles in 2020. The optional standard mileage rate used to calculate the deductible costs of operating an auto for business has decreased by by one-half cent to 57.5 cents per mile. It was 58 cents for 2019 and 54.5 cents for 2018. This mileage rate comes into play if you don’t want to keep track of actual vehicle-related expenses. But you still must record certain information,
Check out this article from USA TODAY…
IRS issues standard mileage rates for 2020 | Internal Revenue Service http://bit.ly/39ymst1
Here’s how the credit for other dependents can benefit taxpayers | Internal Revenue Service http://bit.ly/2LMgb2U
A portion of ancestry genetic testing qualifies as medical care, the IRS has stated, and thus some of the costs may be deductible. In a Private Letter Ruling, the IRS allowed a taxpayer to allocate the costs of health services and the DNA collection kit among medical and nonmedical items and services. The price of the kit must be allocated between the ancestry services and the health services using a percentage. The taxpayer may use a reasonable method to value the cost of the health services between medical services (such as the testing at the laboratory) and nonmedical services (such as reports that provide general information as a test result).
If you own a vacation home and both rent it out and use it personally, classification as a rental property might save tax. Expenses attributable to a rental property aren’t subject to the TCJA’s tightened limits on itemized deductions for property tax and mortgage interest, and losses may be deductible. A rental property generally is one you use for 14 days or less, or under 10% of the days you rent it out,
U.S. citizens with interests in foreign accounts must generally file a Report of Foreign Bank and Financial Accounts (FBAR), or face penalties. One taxpayer failed to file an FBAR or to pay the IRS-imposed penalty of $1.2 million. The IRS filed suit. Both a U.S. District Court and the U.S. 9th Circuit Court of Appeals rejected her claims that the penalty violated the 8th Amendment of the Constitution (Excessive Fines Clause) and violated treaty provisions.
With kids back in school, it’s a good time for parents (and grandparents) to think about college funding. One option, which can be especially beneficial if the children in question still have many years until they’ll be starting their higher education, is a Section 529 plan.
529 plans are generally state-sponsored, and the savings-plan option offers the opportunity to potentially build up a significant college nest egg because of tax-deferred compounding.
To download a PDF version of the below post, please click here:
2017 TCJA Summary and Analysis
**With the recent changes in tax law, we are posting the below as a summary and analysis that we hope will aid in understanding some of the changes in the new tax law that was passed on December 22, 2017. Please note that while efforts were made to assure the accuracy of the below article,
Converting a traditional IRA to a Roth IRA can provide tax-free growth and the ability to withdraw funds tax-free in retirement. But what if you convert a traditional IRA — subject to income taxes on all earnings and deductible contributions — and then discover that you would have been better off if you hadn’t converted it? Fortunately, it’s possible to undo a Roth IRA conversion, using a “recharacterization.”
Reasons to recharacterize
There are several possible reasons to undo a Roth IRA conversion.