Simplified Option for Claiming Home Office Deduction

WASHINGTON — The Internal Revenue Service today announced a simplified option that many owners of home-based businesses and some home-based workers may use to figure their deductions for the business use of their homes.
In tax year 2010, the most recent year for which figures are available, nearly 3.4 million taxpayers claimed deductions for business use of a home (commonly referred to as the home office deduction).
The new optional deduction, capped at $1,500 per year based on $5 a square foot for up to 300 square feet, will reduce the paperwork and recordkeeping burden on small businesses by an estimated 1.6 million hours annually.
"This is a common-sense rule to provide taxpayers an easier way to calculate and claim the home office deduction," said Acting IRS Commissioner Steven T. Miller. "The IRS continues to look for similar ways to combat complexity and encourages people to look at this option as they consider tax planning in 2013."
The new option provides eligible taxpayers an easier path to claiming the home office deduction. Currently, they are generally required to fill out a 43-line form (Form 8829) often with complex calculations of allocated expenses, depreciation and carryovers of unused deductions.  Taxpayers claiming the optional deduction will complete a significantly simplified form.
Though homeowners using the new option cannot depreciate the portion of their home used in a trade or business, they can claim allowable mortgage interest, real estate taxes and casualty losses on the home as itemized deductions on Schedule A. These deductions need not be allocated between personal and business use, as is required under the regular method.
Business expenses unrelated to the home, such as advertising, supplies and wages paid to employees are still fully deductible.
Current restrictions on the home office deduction, such as the requirement that a home office must be used regularly and exclusively for business and the limit tied to the income derived from the particular business, still apply under the new option.
The new simplified option is available starting with the 2013 return most taxpayers file early in 2014. Further details on the new option can be found in Revenue Procedure 2013-13, posted today on IRS.gov. Revenue Procedure 2013-13 is effective for taxable years beginning on or after January 1, 2013, and the IRS welcomes public comment on this new option to improve it for tax year 2014 and later years.

Annual Inflation Adjustments for 2013

IR-2013-4, Jan. 11, 2013
WASHINGTON — The Internal Revenue Service announced today annual inflation adjustments for tax year 2013, including the tax rate schedules, and other tax changes from the recently passed American Taxpayer Relief Act of 2012.
The tax items for 2013 of greatest interest to most taxpayers include the following changes.

• Beginning in tax year 2013 (generally for tax returns filed in 2014), a new tax rate of 39.6 percent has been added for individuals whose income exceeds $400,000 ($450,000 for married taxpayers filing a joint return). The other marginal rates — 10, 15, 25, 28, 33 and 35 percent — remain the same as in prior years. The guidance contains the taxable income thresholds for each of the marginal rates.
• The standard deduction rises to $6,100 ($12,200 for married couples filing jointly), up from $5,950 ($11,900 for married couples filing jointly) for tax year 2012.
• The American Taxpayer Relief Act of 2012 added a limitation for itemized deductions claimed on 2013 returns of individuals with incomes of $250,000 or more ($300,000 for married couples filing jointly).
• The personal exemption rises to $3,900, up from the 2012 exemption of $3,800. However beginning in 2013, the exemption is subject to a phase-out that begins with adjusted gross incomes of $250,000 ($300,000 for married couples filing jointly). It phases out completely at $372,500 ($422,500 for married couples filing jointly.)
• The Alternative Minimum Tax exemption amount for tax year 2013 is $51,900 ($80,800, for married couples filing jointly), set by the American Taxpayer Relief Act of 2012, which indexes future amounts for inflation. The 2012 exemption amount was $50,600 ($78,750 for married couples filing jointly).
• The maximum Earned Income Credit amount is $6,044 for taxpayers filing jointly who have 3 or more qualifying children, up from a total of $5,891 for tax year 2012.
• Estates of decedents who die during 2013 have a basic exclusion amount of $5,250,000, up from a total of $5,120,000 for estates of decedents who died in 2012.
• For tax year 2013, the monthly limitation regarding the aggregate fringe benefit exclusion amount for transit passes and transportation in a commuter highway vehicle is $245, up from $240 for tax year 2012 (the legislation provided a retroactive increase from the $125 limit that had been in place).

Details on these inflation adjustments and others are contained in Revenue Procedure 2013-15, which will be published in Internal Revenue Bulletin 2013-5 on Jan.28, 2013. Other inflation adjusted items were published in October 2012 in Revenue Procedure 2012-41.

Credit Repair and Your Tax Refund

It's Tax time and many people will be using their individual income tax refund to make purchases for things like a car or house. According to the IRS, the average federal tax refund for tax year 2011 was $3,000. As congress and the IRS give more tax breaks and tax credits increase the tax refunds will also increase.

One of the best investments that an individual can make is to invest in yourself. I'm talking about building wealth through rebuilding your personal credit. Having a good credit score will help you save money and make your life much easier. You can certainly survive with bad credit, but it’s not always easy and definitely not cheap.

In our post-crisis economy, good credit isn't just nice to have -- it's essential if you want to level the playing field with lenders.


Having a good credit union with yourself is key to getting the vehicle that you desire. Good credit is essential to getting approved for a mortgage on your dream real estate home. Having a good credit union also allows you to get the best rates on credit cards, car insurance, requires no security deposit for utilities and approval on rental property. Below is your credit score grade. Your aim should be 700 and above.

• 750 – 850: A
• 700 – 749: B
• 630 – 699: C
• 580 – 629: D
• 300 – 529: F

Before you go and put down a huge down payment on a depreciating asset like a used car, I encourage you to get your personal credit repair first. Good credit will get you approved for the lowest APR with No Down Payment. Your tax refund money can be used to fund a IRA, 401K or any other investment account that will yield you a nice return and grow tax free over time. Check out the graph below as it compares auto loans rates based on your FICO score.

36 Month Auto Loan Rates

These are sample rates on a $25,000 auto loan (as of May 10, 2012).

FICO Score	APR	Monthly payment
720-850	3.589%	$734
690-719	5.012%	$749
660-689	7.204%	$774
620-659	10.936%	$818
590-619	16.031%	$879
500-589	17.183%	$894

As you can see, having good credit is essential to your personal finances. At Good credit union we can help you build a solid personal credit file in less than 60 days. Our team of professionals have the experience and knowledge to assist clients with credit repair. With our unlimited resources, we're able to remove most negative items like Bankruptcy's, Foreclosures, Judgements, Inquiries, Tax Liens, Repossessions, Collections and Private Student Loans.

Give us a call today to get started on rebuilding your personal credit file. We can can help you develop a solid plan to get you a 700 credit score in less than 60 days.  Say by to bad credit and hello to Good Credit Union.

Alex Pierre Louis, EA
Credit Consultant
1-800-625-7157
www.goodcreditunion.com
alplouis@goodcreditunion.com

Credit Repair and Good Credit Union

It's a New Year and I know many people will be setting goals and making resolutions. Credit repair is one resolution that most people make for the New Year and somehow never follow through with the process of getting their personal credit repaired. The perfect resource to get your credit fixed is Good Credit Union.

Good Credit Union is the number one credit repair company in the industry. Good Credit Union have many services that we offer to assist individuals with personal credit repair. Our services are guaranteed or your money back. Our staff of credit professional are very knowledgeable about the credit repair industry and we work to provide to the most desired results for our clients.

We have many services that we offer to our clients.   We do a full credit sweep of negative items off of your report.                          


Bankruptcy Removal 
Foreclosure Removal
Private Student Loan Removal
Auto Repossessions
Judgements
Collections
Inquiries 
Liens
Checks System Information removal

In addition to removing negative items from your personal credit file we also offer credit enhancement products. We offer primary trade lines, authorize user accounts and installment loans to be added to your personal credit file as trade lines to boost up your credit score. Whether you're needing to qualify for a mortgage loan, vehicle loan or any other financing, we can get you qualified in less than 90 days.

Free consultation is available for those who are serious about fixing their personal credit files. Good Credit Union will provide you with a sound plan to get your credit cleaned and you maybe able to achieve a 800 credit score. Credit is wealth.

Visit us online today to get started on rebuilding your personal credit file. Get the credit you deserve and begin building wealth like the Rich. 

Al,
www.goodcreditunion.com
alplouis@GoodCreditUnion.com
1-800-652-7157 (Phone)
 

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2013 Standard Mileage Rates Up 1 Cent per Mile for Business

WASHINGTON — The Internal Revenue Service today issued the 2013 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes.

Beginning on Jan. 1, 2013, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be:

• 56.5 cents per mile for business miles driven
• 24 cents per mile driven for medical or moving purposes
• 14 cents per mile driven in service of charitable organizations

The rate for business miles driven during 2013 increases 1 cent from the 2012 rate.  The medical and moving rate is also up 1 cent per mile from the 2012 rate.
The standard mileage rate for business is based on an annual study of the fixed and variable costs of operating an automobile. The rate for medical and moving purposes is based on the variable costs.
Taxpayers always have the option of calculating the actual costs of using their vehicle rather than using the standard mileage rates.
A taxpayer may not use the business standard mileage rate for a vehicle after using any depreciation method under the Modified Accelerated Cost Recovery System (MACRS) or after claiming a Section 179 deduction for that vehicle.  In addition, the business standard mileage rate cannot be used for more than four vehicles used simultaneously.
These and other requirements for a taxpayer to use a standard mileage rate to calculate the amount of a deductible business, moving, medical, or charitable expense are in Rev. Proc. 2010-51.  Notice 2012-72 contains the standard mileage rates, the amount a taxpayer must use in calculating reductions to basis for depreciation taken under the business standard mileage rate, and the maximum standard automobile cost that a taxpayer may use in computing the allowance under a fixed and variable rate plan.

IRS Warns Tax Preparers about EITC

Preparers Suspected of Filing Inaccurate EITC Claims to Receive Warning Letters During October and November of 2012, we are sending out letters to preparers suspected of filing inaccurate EITC claims. There are two sets of letters. One group of letters is titled, You may have violated tax law by submitting inaccurate returns. We are sending out these letters to preparers who filed returns with questionable claims for EITC. The letters pinpoint the primary issues identified on the returns, talk about the consequences of filing inaccurate claims for EITC, and lets the preparer know we will continue to monitor the types of claims for EITC they file. For more information and examples of the letters, see our section, Reaching out to Preparers. Also, we are sending Letter 4833 as part of Real Time EITC Preparer Pilot program. Read more about the Real Time EITC Preparer Pilot here.