IRS Lowering Mileage Allowances For Business Travel
The IRS has announced that the optional mileage allowance for owned or leased autos (including vans, pickups or panel trucks) will decrease by $.05 to $.56 per mile for business travel starting January 1, 2014. This rate can also be used by employers to reimburse tax-free under an accountable plan employees who supply their own autos for business use, and to value personal use of certain low-cost employer-provided vehicles.
The rate for using a car to get medical care or in connection with a move that qualifies for the moving expense will also decrease by $.05 to $.235 per mile. The rate for service to a charitable organization is unchanged at $.14 per mile. Notice 2013-80, 2013-52 IRB ; IR 2013-95
8 Tax Breaks Set to Expire at the End of 2013
April 15 will be here sooner than you think! With a little planning before the end of the year, you could take advantage of tax breaks to help you lower your tax bill. Several tax provisions are scheduled to expire at the end of this year. Many of these tax breaks have been extended in the past, so it’s possible Congress could extend them again. Click HERE for a look at eight tax breaks to consider now before they disappear.
2014 Inflation Adjustments
The IRS has released its list of inflation-adjusted tax amounts for 2014. The list includes tax rate tables for estates, trusts and various filing statuses, standard deduction amounts, personal exemption amounts, AMT exemption, and gift tax annual exclusion. Below is a full list of the items from the IRS:
The tax items for tax year 2014 of greatest interest to most taxpayers include the following dollar amounts.
- The tax rate of 39.6 percent affects singles whose income exceeds $406,750 ($457,600 for married taxpayers filing a joint return), up from $400,000 and $450,000, respectively. The other marginal rates – 10, 15, 25, 28, 33 and 35 percent – and the related income tax thresholds are described in the revenue procedure.
- The standard deduction rises to $6,200 for singles and married persons filing separate returns and $12,400 for married couples filing jointly, up from $6,100 and $12,200, respectively, for tax year 2013. The standard deduction for heads of household rises to $9,100, up from $8,950.
- The limitation for itemized deductions claimed on tax year 2014 returns of individuals begins with incomes of $254,200 or more ($305,050 for married couples filing jointly).
- The personal exemption rises to $3,950, up from the 2013 exemption of $3,900. However, the exemption is subject to a phase-out that begins with adjusted gross incomes of $254,200 ($305,050 for married couples filing jointly). It phases out completely at $376,700 ($427,550 for married couples filing jointly.)
- The Alternative Minimum Tax exemption amount for tax year 2014 is $52,800 ($82,100, for married couples filing jointly). The 2013 exemption amount was $51,900 ($80,800 for married couples filing jointly).
- The maximum Earned Income Credit amount is $6,143 for taxpayers filing jointly who have 3 or more qualifying children, up from a total of $6,044 for tax year 2013. The revenue procedure has a table providing maximum credit amounts for other categories, income thresholds and phaseouts.
- Estates of decedents who die during 2014 have a basic exclusion amount of $5,340,000, up from a total of $5,250,000 for estates of decedents who died in 2013.
- The annual exclusion for gifts remains at $14,000 for 2014.
- The annual dollar limit on employee contributions to employer-sponsored healthcare flexible spending arrangements (FSA) remains unchanged at $2,500.
- The foreign earned income exclusion rises to $99,200 for tax year 2014, up from $97,600, for 2013.
- The small employer health insurance credit provides that the maximum credit is phased out based on the employer’s number of full-time equivalent employees in excess of 10 and the employer’s average annual wages in excess of $25,400 for tax year 2014, up from $25,000 for 2013.
Details on these inflation adjustments and others not listed in this release can be found in Revenue Procedure 2013-35, which were published in Internal Revenue Bulletin 2013-47 on Nov. 18, 2013.