You Can Deduct Up To 55.5 Cents a Mile in 2012

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You Can Deduct Up To 55.5 Cents a Mile in 2012

Jan 19, 2012 Posted by Sanjiv 1 Comment

Now you can deduct up to 55.5 cents a mile for business driving expense.   You can use this rate for all kind of vehicles including cars, vans, pick up and panel trucks.  Rate increase was recently announced by the IRS for the year of 2012.

You can deduct actual cost of vehicle operation by keeping track of expenses.  However, Standard Mileage deduction can be used by those who do not keep track of actual cost.  Standard mileage rate is determined by authorities using the annual study of fixed and variable cost of automobile operation.

In addition to the mileage rate, you can claim a separate deduction for expenses like, parking fees, or tolls.  You can also deduct interest and state and local taxes relating to the purchase of the automobile.

Please note when the standard business mileage rate is used, automobile depreciation will be considered to have been allowed at a rate of 23 cents a mile. This depreciation will reduce your cost basis in the vehicle.

Where you cannot use the standard deduction?

For the most part, standard deductions are great place to start if you do not document each expense.  However, in some cases standard deduction is not your friend. For example, you cannot use standard mileage deduction for automobiles used for hire like taxicabs.  You cannot use standard deduction of vehicle that was previously depreciated by other than straight-line method.

We recommend, you consult with your Tax Professional to ensure your deduction is calculated accurately.

Education Tools

Dec 26, 2011 Posted by deepak No Comments

Education Planning

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529 plans
529 plans and financial aid eligibility
529 plans vs. other college savings options
529 plans: The ins and outs of contributions and withdrawals
Choosing a state savings plan
Estate planning and 529 plans
Income tax planning and 529 plans
Making changes to your 529 account
Opening a 529 account
The ABCs of 529 plans
Education planning basics
ABCs of financial aid
Can I afford to send my child to college?
Education tax credits
Finding money to pay college bills out of pocket
Going back to school as an adult
Health insurance for college students
Helping your child make the transition from high school to college
How student loans impact your credit
Research tips when choosing a college
Saving for retirement and a child’s education at the same time
Sticker shock–creative ways to lower the cost of college
Student loan basics
The best ways to save for college
The college application process
Decision Tools
529 plans
529 plans vs. Coverdell education savings accounts
529 plans: advisor-sold state savings plans
529 plans: direct-sold state savings plans
529 plans: prepaid tuition plans
State savings plan nonqualified withdrawals calculator
State savings plans vs. prepaid tuition plans
Determining how much to save for college
College savings analyzer
Finding the funds to pay for a college education
Higher education figures at-a-glance
Evaluating college savings options
Advantages and disadvantages of 529 plans
Advantages and disadvantages of Coverdell education savings accounts
Advantages and disadvantages of custodial accounts for college savings
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College funding options analyzer
College savings vehicles compared
Financial aid
College application and financial aid calendar
Comparison of federal higher education loans
Financial aid calendar
Tax issues
Comparison of education tax credits and deductions
Qualified education expenses defined
Summary of tax-advantaged college savings options
FAQs
529 plan basics
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How long have 529 plans been around?
How many states currently have 529 plans?
What can you tell me about employer-sponsored 529 plans?
What is the Independent 529 Plan?
What’s the difference between state savings plans and prepaid tuition plans?
Who can legally offer 529 plans?
Why are these plans referred to as “529” plans?
529 plan expenses and fees
Do 529 plan expenses vary among states?
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529 plans and financial aid
How will my 529 account be treated for financial aid purposes?
I opened a state savings plan account for my grandchild many years ago, and he’s now filling out financial aid applications. Do his parents need to list the value of the account in their assets, or does my grandchild list the value of the account as his asset?
529 plans vs. other ways to save for college
How does a 529 plan compare with a Coverdell education savings account?
How does a 529 plan compare with an UGMA/UTMA custodial account in my child’s name?
How does a 529 plan compare with investing in a mutual fund in my name?
How does a 529 plan compare with using U.S. savings bonds for college expenses?
529 plans: Changing plans (rollover)
Can I move funds from my Coverdell education savings account to a 529 plan?
Can I roll over my existing 529 account to another state’s 529 plan without penalty?
Does it make sense to cash in my prepaid tuition plan and contribute the money to a state savings plan instead?
529 plans: Choosing or changing a beneficiary or account owner
Can a 529 account have more than one beneficiary?
Can I change the beneficiary of a 529 account?
Can I open a 529 account and name myself as beneficiary?
Is there an age limit on who can be a beneficiary of a 529 plan?
Under what circumstances can the account owner of a 529 plan be changed?
Who can be a beneficiary of a 529 plan?
529 plans: Death of account owner or beneficiary
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What happens if I open a 529 account for my child and then I die–who would control the account?
What happens if the beneficiary of the 529 account dies?
529 plans: Making contributions
Can contributions to a 529 plan be directly debited from my checking account?
Can I contribute my own stocks and bonds to the 529 account I’ve set up for my child?
Can I make contributions to a 529 account and a Coverdell education savings account in the same year for the same beneficiary?
Can I transfer my child’s UGMA/UTMA custodial account to a 529 plan?
How much can I invest in a 529 plan?
How often can I make contributions to my child’s 529 account?
I’m putting money into a 529 plan for my grandchild. But are the 529 assets subject to Medicaid spend-down requirements?
Should I invest a lump sum, or is there a way to use dollar cost averaging when investing in a state savings plan?
529 plans: Tax issues
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Can I use 529 funds to pay my child’s college expenses in the same year I take either the Hope credit or the Lifetime Learning credit?
How does the annual gift tax exclusion apply to contributions to a 529 plan?
I intend to make tuition payments directly to my grandchild’s college, and I know this will reduce my estate. But would it be better to contribute to a 529 plan instead?
I know that qualified withdrawals from state savings plans are now exempt from federal income tax. But what about state taxes?
I opened a 529 plan and my child is the beneficiary. If my mother makes a contribution to the plan, is that considered a gift to me or to my child?
I opened a state savings plan sponsored by a different state than my own. Will I get that state’s tax benefits?
I’d like to make a lump-sum contribution to my grandchild’s 529 account. Will I owe gift tax?
If I cash in Series EE U.S. savings bonds I purchased 10 years ago and contribute the proceeds to a 529 plan, can I still avoid paying tax on the proceeds?
The Economic Growth and Tax Relief Reconciliation Act of 2001 contains sunset provisions. Should I be worried about this?
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Will I pay income tax when the money in my 529 plan is withdrawn to pay for college expenses?
Will the value of my 529 account be included in my estate or my beneficiary’s estate?
Applying to college
How many colleges should my child apply to?
When are college applications due?
Borrowing against your 529 account
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I know I can borrow against my 401(k), but can I borrow against the value of my 529 account?
Choosing a 529 plan
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I’ve decided on a state savings plan, but how do I go about choosing one?
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College students and insurance
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Education tax credits
Now that my child is in college, am I entitled to any education tax credits?
What are the Hope credit and the Lifetime Learning credit?
Financial aid
Are any financial aid programs tailored especially to parents of post-secondary students?
Are there any assets that are not counted for financial aid purposes?
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Can we negotiate our child’s financial aid award?
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How does the federal financial aid process work?
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Opening a 529 account
Are there rules on who can open a 529 account?
Can a non-U.S. citizen open a 529 account?
Can I open a 529 account for a nonrelative?
Can I open a 529 account in anticipation of my future grandchild?
Can I open a 529 plan with a lump sum?
Can more than one account be opened for the same child?
Can my spouse and I open a joint 529 account for our child?
Does it make sense to open a 529 account if my child is only two years away from college?
How do I enroll in a state’s 529 plan?
I have two children. Should I open one account for both children or one account for each child?
If I open a 529 account, will my child’s choice of college be restricted?
Is there an income limit on who can open an account?
What happens if I open a 529 plan in one state and then move to another state?
Paying for college
I’ve heard that a grandparent can pay a grandchild’s tuition directly to the college without any gift tax problems. Is this true?
Should I take out a home equity loan to pay for my child’s tuition?
Should I use my 401(k) to fund my child’s college education?
Should I withdraw money from my IRA to pay for my child’s college tuition?
Saving for college
Are government savings bonds risk free?
Are savings bonds a good way to save?
Are state savings plans a good way to save for college?
Can an UGMA/UTMA account reduce my child’s financial aid for college?
Do series EE bonds offer any special advantages if used for college savings?
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How can I save for my child’s college education?
How can we possibly save for retirement and our child’s college education at the same time?
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Selecting a college
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I’m having trouble paying my student loans. What should I do?
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Is my rate of return guaranteed under a 529 plan?
What recourse do I have if I’m unhappy with my state savings plan’s investment performance?
What’s the difference between how a state savings plan invests and how a prepaid tuition plan invests?
Using or withdrawing 529 funds
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How do I prove that a distribution request is for my child’s college expenses and not for some other purpose?
Must the funds in a 529 plan be used for tuition only, or can they be used for room and board expenses?
My child got a full scholarship to college–now what?
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My child is the beneficiary of a 529 plan. Can we use the 529 funds for her private elementary or secondary school?
My child will be going to college next year and using 529 funds to pay expenses–what do I need to do?
What happens if I need to use the funds in a 529 plan before my child goes to college?
What happens if I open a 529 account for my child, and she later becomes disabled and doesn’t go to college?
What happens if my child finishes college and there is money left over in the 529 account?
What happens to my 529 plan if my child wants to postpone going to college for a year or two after high school?
What happens to the funds in my 529 account if my child doesn’t go to college?