Changes, Court Cases, Etc.
Increased in Standard Mileage Rates Starting July 1, 2011
Taxpayers can deduct the business portion of actual expenses for operating a motor vehicle. The IRS allows taxpayers to use a standard mileage rate to account for business miles instead of keeping a record of actual expenses, but taxpayers must keep records to account for their business miles.
The IRS has issued new rates effective July 1, 2011-The business rate increases to 55.5 cents per mile (up from 51 cents per mile from January 1, 2011-June 30, 2011). Medical and moving mileage increases to 23.5 cents per mile, and charitable rate remains at 14 cents per mile as this rate is set by Congress.
Reminder-Taxpayers must keep records to not only show total business miles for the year, but they amount must be accounted for both before July 1, 2011 and after.
Mileage Rates for 2012
The business rate remains at 55.5 cents per mile for 2012. The depreciation rate is 23 cents per mile. Charitable rate is 14 cents per mile and does not change until Congress makes such a change. Medical and moving rate is 23 cents per mile down from 23.5 cents per mile applicable for the period July 1, 2011 through December 31, 2011.
President Obama Signs Repeal of New 1099 Reporting Requirements (Emphasis New)
On April 14, 2011, President Obama signed into law H.R. 4, the "Comprehensive 1099 Taxpayer Protection and Repayment of Exchange Subsidy Overpayments Act of 2011". The law basically includes the following:
- Repeals the requirement for rental property owners (landlords) to issue Forms 1099 with 2011 payments
- The requirement for businesses to issue Forms 1099 for product purchases starting with 2012 payments is repealed.
- The requirement for businesses to issue Forms 1099 to corporations starting with 2012 payments is repealed.
Remember, this law DOES NOT REPEAL the previous requirements for issuing 1099 Forms in the ordinary course of business. Taxpayers are still required to issue 1099s for payments to individuals for services performed, attorney payments, etc.
Non-Profits Removed from Tax-Exempt Status
The IRS has posted a list of about 275,000 non-profits across the nation that have has their tax exempt status revoked. Contributions to these once tax exempt organizations that were Section 501(c)(3) organizations are no longer deductible as charitable contributions effective June 9, 2011. Also, the state exempt status for income taxes as well as sales tax exemption may no longer apply.
A monthly list of the non-profit revocations is available at www.irs.gov/charities by clicking on "Automatic Revocation of Exemption". This list can be downloaded as a PDF or Excel file.
Notices 2011-43, 2011-44, and Revenue Procedure 2011-36 provide some relief for organizations that want to reinstate their tax exempt status.
MORE TO COME