FYI TAX UPDATES Part 2

[Fkatz]

Hi Again,


Update (continue)

11. Standard Mileage Rate for 2013 56.5 cents per mile

12. 50% bonus Depreciation can still be used for New assets placed in service in 2013

13. and the total 179 deduction for 2013 is still $500,000 for all assets.put into service in 2013

14. The Per diem rate currently for 2013 is $59.00 in the conus US, and 62.00 per day in Canada. We had not heard of any changes in this rate for 2014. Its been $59.00 since late 2010 and has not changed since.
I am keeping an eye on this one. If there is a change it should be within a month of this writing.

You all have a good week, will try on give you some update next week.


Franklin Katz RTP, ATP, PA, PB
Frank's Tax & Business
315 E. King St
Kings Mountain, NC 28086
704-739-4039
fax: 704-739-3934
website www.prep.1040.com/frankstax

IRS Circular 230: Pursuant to requirements of practice before the Internal Revenue Service, any tax advice contained in this communication (including any attachments) is not intended to be used, and cannot be used, for purposes of (i) avoiding penalties imposed under the United States Internal Revenue Code or (ii) promoting, marketing, or recommending to another person any tax-related matter.

 

[Moot]

14. The Per diem rate currently for 2013 is $59.00 in the conus US, and 62.00 per day in Canada. We had not heard of any changes in this rate for 2014. Its been $59.00 since late 2010 and has not changed since.
I am keeping an eye on this one. If there is a change it should be within a month of this writing.

You all have a good week, will try on give you some update next week.

Thanks Frank. An increase in the per diem rate would be welcome. It ain't getting any cheaper living out here.

 

[cranis]

my company gives us 20$ a day perdiem cash(tax free) and pays our hotels(day cab) is there any way to get a better tax break? since rate is 59$ or is the hotel inclided in per diem..

 

[Fkatz]

To Moot, I am afraid that is not going to change, the new per deim rates were finally posted in this memo.

2013-2014 Special Per Diem Rates
Notice 2013-65
SECTION 1. PURPOSE
This annual notice provides the 2013-2014 special per diem rates for taxpayers to use in substantiating the amount of ordinary and necessary business expenses incurred while traveling away from home, specifically (1) the special transportation industry meal and incidental expenses (M&IE) rates,
(2) the rate for the incidental expenses only deduction, and
(3) the rates and list of high-cost localities for purposes of the high-low substantiation method.

SECTION 2. BACKGROUND
Rev. Proc. 2011-47, 2011-42 I.R.B. 520, provides rules for using a per diem rate to substantiate, under § 274(d) of the Internal Revenue Code and § 1.274-5 of the Income Tax Regulations, the amount of ordinary and necessary business expenses paid or incurred while traveling away from home. Taxpayers using the rates and list of high-cost localities provided in this notice must comply with Rev. Proc. 2011-47.

Notice 2012-63, 2012-42 I.R.B. 496, provides the rates and list of high-cost localities for the period October 1, 2012, to September 30, 2013.
Section 3.02(3) of Rev. Proc. 2011-47 provides that the term “incidental
expenses” has the same meaning as in the Federal Travel Regulations, 41 C.F.R. 300- 3.1, and that future changes to the definition of incidental expenses in the Federal Travel Regulations would be announced in the annual per diem notice. On October 22, 2012, the General Services Administration published final regulations revising the definition of incidental expenses under the Federal Travel Regulations to include only
fees and tips given to porters, baggage carriers, hotel staff, and staff on ships. Transportation between places of lodging or business and places where meals are taken, and the mailing cost of filing travel vouchers and paying employer-sponsored charge card billings, are no longer included in incidental expenses. Accordingly, taxpayers using per diem rates may separately deduct or be reimbursed for transportation and mailing expenses.

SECTION 3. SPECIAL M&IE RATES FOR TRANSPORTATION INDUSTRY
The special M&IE rates for taxpayers in the transportation industry are $59 for any locality of travel in the continental United States (CONUS) and $65 for any localityof travel outside the continental United States (OCONUS). See section 4.04 of Rev.Proc. 2011-47.

SECTION 4. RATE FOR INCIDENTAL EXPENSES ONLY DEDUCTION
The rate for any CONUS or OCONUS locality of travel for the incidental
expenses only deduction is $5 per day. See section 4.05 of Rev. Proc. 2011-47

Sorry all, but they are not going to raise the Per Diem Period this year again.

Franklin Katz, RTRP, ATP, PA, PB
Frank's Tax & Business Service
315 E. King St.Kings Mountain, NC28086704-739-4039 E-Mail: [email protected])Web: www.prep.1040.com/frankstax

IRS Circular 230 Notice: Unless expressly stated otherwise inthis
transmission, any tax advice contained herein, forwarded with or attached to this message was not and is not intended to be used, nor may it be relied upon or used, by any taxpayer for the purpose of (1) the avoidance of any tax-related penalties under the Internal Revenue Code or applicable state or local tax law provisions, or (2) promoting, marketing or recommending to another party any tax transaction or tax-related matters that may be addressed herein.

 

[Fkatz]

Hi Cranis,

I think that your telling me that you are a Company driver since your in a Day Cab, and that you receive a hotel which is paid for by your company if that is the case, you are not entitled to the per Diem at all, In order to get the per Diem you must be out overnight and is based on a full 24 hour period,

Here is the problem that you have, for the nights that you actually stay overnight in a hotel you are entitled to the per Diem so you have to have accurate records (log Books) to prove the deduction. The hotels is another problem that you have the Company Pays for them. you do not use any out of pocket on your end to pay for the hotel. So they cannot be deducted., the other problem you have is the amount of per Diem that they pay you a day,

Since you are not entitled to the per Diem you have to due a reimbursement on the form 2106 on your tax return showing that reimbursement

on form 2106 employee business Expense
line 1 is for Postal workers only
Line 2 is for Parking, transportation, and tolls,
Line 3 is for Travel (Hotels)
line 4 is for other business expense,
lIne 5A is for Meals/ Entertainment to sub to 50%
Line 5b, is for your Per Diem subject to 80% of the total

and then line 7 is your Reimbursement which means that $20.00 or $100.00 per week has to be deducted from the total of lines 1-5B and the total will give you the deduction
If you do not file a Long Form, Sch A, Itemized Deductions, the amount that would carryover from the 2016 must be greater than the standard deduction listed below. it the total is less that the standard deduction there is no deduction for you Per Diem

Married filing Joint $12,200.00
Single and Married filing Separately $6,100.00

so that is the problem that you face, the per Diem does not really pertain to you as a deduction due to being a Company driver. if you travel every day more that 500 miles round trip and stay overnight then you would be entitled to it. but due to the reimbursement it probably will not be allowed
cause if you get $20 per day or $100 per week that equals $5200.00 that would have to be deducted from the per Diem
if any.

Here is a explanation

Your actually out lets say 75 days, X $59.00 -$4,425.00 X 80%= $ 3,540.00, then the $5,200 so your deduction is $0. The amount does not cover your Standard Deduction so it cannot be deducted at all. unless you have the following
Mortgage Interest, Real Estate Taxes, vehicle taxes, cash Contributions. The medical Expenses are subject to 10% of your Adjusted Gross income. if your deductions total over $6,100 for Single then they can be deducted over and above the standard deduction which they are added to.

Sorry if the information is not going in your favor, but there is nothing else you can do

Franklin Katz, RTRP, ATP, PA, PB
Frank's Tax & Business Service
315 E. King St.
Kings Mountain, NC 28086
704-739-4039
E-Mail: [email protected])Web: www.prep.1040.com/frankstax

IRS Circular 230 Notice: Unless expressly stated otherwise in this transmission, any tax advice contained herein, forwarded with or attached to this message was not and is not intended to be used, nor may it be relied upon or used, by any taxpayer for the purpose of (1) the avoidance of any
tax-related penalties under the Internal Revenue Code or applicable state or local tax law provisions, or (2)
promoting, marketing or recommending to another party any tax transaction or tax-related matters that may be
addressed herein.