Happy Friday the 13th! Here are some questions that have come in recently.
Q: Can a noncustodial parent take mileage writeoffs?
A: This is hard to answer without more information. If you are asking about mileage driven to pick up your kids, the answer would be no.
Q: At what age do you stop filing taxes?
A: There is no magical age where taxes go away. However, the income thresholds for being required to file a return get friendlier as you get older. See IRS Publication 17 for more information.
Q: Must an asset be brand new to qualify for bonus depreciation?
Q: What would be the gift tax on a 2012 Cadillac worth $40,000?
A: Assuming you are the “giver” of the gift, the taxable gift amount would $27,000 (there is a $13,000 exclusion amount). My quick look at the gift tax rates came up with $3,200 of gift tax assessed on a $27,000 gift, but most people would end up using part of their lifetime credit and not actually owe tax.
Q: How much is the Iowa Earned Income Credit per child?
A: The Iowa EIC is not based on a per-child basis. It’s a straight 7% of whatever your federal EIC is.
Q: Can a nonlicensed daycare deduct expenses?
A: Yes, except possibly the deduction for business use of the home. For unlicensed daycares, that deduction is only available if you are not required to be licensed.
Q: I am a new Enrolled Agent. How much should I charge for taxes?
A: It depends on the going rate for tax services in your area. You want to make sure you’re in the middle. Don’t be the cheapest game in town.
Q: Who do you use for your secure website?
A: I use a provider called “CPA Secure”, www.cpasecure.com, and it works great.
“This blog post, along with comments that may follow, should not be considered tax advice. Before you make final tax or financial decisions, please secure a professional tax advisor to give you advice about your unique situation. To secure Jason as your accountant, please click on the ‘Services’ link at the top of the page.”