The IRS Deductions Blog

Posts Tagged ‘2011’

Question: Has anyone claimed the 50 cents / Km from CCRA on a home business?

If I earn a salary and also have a secondary home business, say advising about RRSPs, can I claim the 50 cents / Km when I drive to Thunder Bay for a wedding & fishing and talk to relatives about their RRSP?
I know women sell cookware and cosmetics as a part-time job, and I presume they claim their mileage as a business expense against their combined yearly income (full time job $$ + part time job $$).
At 7 Litres per 100 Km; @ $1.25 / L.; 2000 Km; gas costs are $175. The tax deduction is (2000 X .50) $1,000 off my taxable income, or (at 30% tax bracket) $300 in my pocket.
Sound reasonable? Have I made an error?
If Ford Motor Co. told me to drive to Thunder Bay and talk to the mechanics / dealers there, it would be a business expense for the Ford Motor Co.

Answer: When you report business income and deductions, there is no such provision to claim a set amount per kilometer. You can only claim what you have actually paid. The other posters have addressed the legitimacy of such a claim, so I will tell you that you actually need to keep a log book for every motor vehicle claim you make. This means you must write down exactly how many kilometers you drove to work in the morning, then to lunch, then to the grocery store, then home, then to the gas station, then to your hairdressers. etc… etc…. and you need to determine how many kilometers are for personal ( which includes driving to your workplace ) and how many are for business. In your case it would be very low…

Let’s say you came up with 10% of your total driving was for business. You would also have to keep ALL of your fuel receipts and add them up, and you would then be able to claim 10% of the total fuel receipts you have provided. This would be your fuel claim. The same percentage would follow through on maintenance and repairs, and insurance etc…

Also, your business has to have the potential to earn income. If you have not earned any income from this business, you cannot claim any expenses.

Now… all of this would only have to be proven if you were chosen for audit. I doubt you would be checked out if you claimed 10% or another small amount, but your deductions have to be reasonable overall.

Items on Amazon Right Now for Rrsp Tax Deduction:

Five RRSP mistakes you should avoid

Want to make more on your Registered Retirement Savings Plan? Here’s some common mistakes that can cost you money

Understanding the First Time Home Buyer’s Tax Credit – CIR Realty Business Tip

Question: What is the best way to file with the IRS if your married to get the most of your return?

My wife and I were wondering how we should do our taxes come tax season. Last year we claimed and file jointly and received about $3200 after we paid H an R block. This is our first time filling together (recently married) and my wife always received about $4500 from the irs because of her two girls. She makes 27,000 a year and qualified for earned income credit I guess. I make 45,000 and have to pay for a lot more taxes of course. We also own a house together as well. I claimed single this and she claimed jointly. What would be the best way to file and receive a larger refund.?

I went to the irs calculator and inputed (my) info and it said I would only have to pay $2200 if I claimed jointly???
But if you go to the tax tables (after the standard deduction) the tax rate is double or more (almost $6000). Which one is right?
Thank you in adavnce!!!

Answer: Once you are married, you no longer have the option of filing single – you can file as married filing separately, or jointly. Joint is almost always better for you as far as how much tax you pay/how much refund you get.

As a single mom she would have been eligible for EIC, but not now – someone filing as married filing separately isn’t eligible in any case, and on a joint return your income is too high.

It’s not possible for her to file a joint return and you to file separately. If you sent them in that way, you’ll be hearing from the IRS since you would have filed twice. Or more likely they’ll just reject the 2nd one they process -and they won’t catch it until a year or two from now when they finish matching up the returns to the W-2’s they got, then you’ll get an impressive bill for the tax you still owe plus penalties and interest.

To use a calculator for a joint return, you have to enter BOTH people’s info, not just one. When you file jointly, both of your info is added together on the same return.

The tax % you see in the tax tables is the % you pay on the highest dollar, not on all of your income.

Items on Amazon Right Now for Standard Deduction Calculator:

Is it time to refinance a mortgage?

Dear Dr. Don, I have a $390,000 mortgage at a 5½ percent fixed interest rate for 30 years. I have 27 years left in the current term. Is it a good idea to refinance the loan for 30 years fixed at a 4.37 percent interest rate? Closing costs will be $1,800.

Items on Amazon Right Now for Standard Deduction And Personal Exemption 2009:

‘Millionaire’s tax’ could hit more Mainers this year

When the alternative minimum tax first was passed in 1969, it was called the “millionaire’s tax” and was aimed at preventing the very rich from escaping federal income tax …

House Session 2010-04-15 (17:25:18-18:26:55)

Question: Is standard deduction still available in India for income tax?

Answer: Standard Deduction has been withdrawn effective Financial year 2005-06

Items on Amazon Right Now for Income Tax Standard Deduction India:

Niko Reports Results for the Quarter Ended June 30, 2010

CALGARY, ALBERTA– – Niko Resources Ltd. is pleased to report its financial and operating results, including consolidated financial statements and notes thereto, as well as its managements’ discussion and analysis, for the quarter ended June 30, 2010, the first quarter of Niko’s fiscal year.

Preparing India Income Tax Return – Part 3

Question: Can I deduct personal exemptions in addition to standard deduction?

I just heard, for the first time, about personal exemptions ($3500) as a deduction for reducing your taxable income. So far, I have always deducted the standard deduction ($8750 for 2008) on my 1040EZ form. Can I use the personal exemption in addition to the standard deduction? How/where would I do that? Does this mean I missed out all these years?

Can I also use personal exemptions if I itemize on Schedule A?

Thank you very much

Claudia

Answer: The standard deduction is $5450 (single filer) for 2008 tax year. 1040EZ really makes it easy for you cuz it combines the standard deduction and personal exemption already. You are not missing out on the personal exemption.

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Dunne: MEA Council Meeting

Good afternoon and thank you for inviting me to speak to you today.

MeltDown #410 EMERGENCY ECONOMIC STABILIZATION