Recently, the Internal Revenue Service (IRS) announced the new standard mileage rates to deduct vehicle expenses for the 2015 tax year. The latest rules impact individuals using a vehicle for business, charity, or medical and moving purposes. With the exception of the costs related to business, the standard mileage rates all stayed the same or were slightly down from 2014 due to lower gas and oil costs.
For 2015, the standard mileage rate increases to $0.575 for business miles driven, up from $0.56 in 2014 (reference: Internal Revenue Notice 2014-114). While the IRS expects fuel prices to be lower in 2015, an annual study indicated higher fixed and variable costs for operating an automobile, including depreciation, insurance, repairs, tires, and maintenance.
The rate will be $0.23 per mile for medical or moving purposes, down $0.005 from 2014, and $0.14 per mile driven in service of charitable organizations. The medical and moving expenses are based on the lower expected price of oil, while the charitable rate is set by law.
Many taxpayers often review tax planning strategies after the New Year. Before you say goodbye to 2014, there are several tax savings strategies that you may be able to implement now. If you wait until after December 31st, it will be too late.
Investors can reduce their taxable income by realizing capital losses. After netting capital gains against losses, taxpayers can offset up to $3,000 of ordinary income and carry-forward the remaining amount for future years. Please note that the character of the investment as long-term versus short-term will impact the way in which gains and losses are netted.
When most of us think about our accountant, filing taxes often comes to mind. However, accountants are trusted advisers that can offer much more to their clients than just preparing tax returns. Recently, we had a chance to speak with Greg Freyman, CPA to learn more about his Jacksonville Florida based accounting practice and the innovative ways he is able to offer value to his clients.