About Coach Janelle CPA
My passion is to help 6 & 7- figure+ earners see their financial possibilities through financial literacy and strategy.
I want to help you save on taxes so you can keep more of your money to live the life you dream of and have worked for NOW, and build wealth and equity for the next generation.
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Check Out Some Of Our Latest Blog Post
Self-Employment Taxes for Partners and LLC Members
Written by Coach Janelle CPA on August 20, 2022
Does a member of a limited liability company (LLC) or a partner in a partnership have to pay self-employment taxes on the member’s or partner’s share of the entity’s income? Incredibly, the answer is not alw...
Paying Your Child: W2 or 1099?
Written by Coach Janelle CPA on August 8, 2022
Here’s a question I received from one of my clients: “I will hire my 15-year-old daughter to work in my single-member LLC business, and I expect to pay her about $12,000 this year. Do I pay her through payroll checks and file a...
Transferring Your Home to Your Adult Child
Written by Coach Janelle CPA on August 1, 2022
With today’s home prices and the crazy real estate market, it’s likely difficult for your children to buy a home. And it’s conceivable that you are ready to move on from your existing home. If this is true, consider...
Selling Your Appreciated Vacation Home? Consider the Taxes
Written by Coach Janelle CPA on July 27, 2022
The tax-code-defined vacation home rules come into play when you have both rental and personal use of a home. Thus, you can have tax-code-defined vacation homes in the city, in the suburbs, and in recreati...
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THE NEW 62.5 CENTS MILEAGE RATE
Written by Coach Janelle CPA on August 29, 2022
The IRS noticed that average gas prices across the United States exceeded $5.00 a gallon and took action. Small businesses that qualify to use and do use the standard mileage rate can deduct 62.5 cents per business mile from July 1 through December 31, 2022. That’s up 4 cents a mile.
This brings up a practical question: what do you do if you track business mileage using the three-month sample method? What do you do if you track business mileage using the three-month sample method?
Three Month Basic Sample
As a reminder, here are the basics of how the IRS describes the three-month test:
1. The taxpayer uses her vehicle for business use.
2. She and other members of her family use the vehicle for personal use.
3. The taxpayer keeps a mileage log for the first three months of the taxable year, showing that she uses the vehicle 75 percent of the time for business.
4. Invoices and paid bills show that her vehicle use is about the same throughout the year.
According to this IRS regulation, her three-month sample is adequate for this taxpayer to prove her 75 percent business use.
Sample-Method Solution to New July 1 Mileage Rate
To use the sample rate, you need to prove that your vehicle use is about the same throughout the year. Your invoices and paid bills prove the mileage part, and your appointment book can add creditability to consistent business and personal use. Keep in mind that the sample is just that—a sample—it’s pretty exact for the three months but not that exact for the year, although it must adequately reflect the business mileage for the year. If you have a good three-month sample, you take your business mileage for the year and apply the 58.5 cents to half the mileage and the 62.5 cents to the remaining half to find your deductions.
For example, say you drove 20,000 business miles for the year. Your deduction would be
$12,100 (10,000 x 58.5 cents + 10,000 x 62.5 cents).
Mileage Record for the Full Year
If you have a mileage record for the entire year, no problem. Your record gives you the mileage for the first six months and the last six months.
Small Call to Action Headline
THE NEW 62.5 CENTS MILEAGE RATE
Written by Coach Janelle CPA on August 29, 2022
The IRS noticed that average gas prices across the United States exceeded $5.00 a gallon and took action. Small businesses that qualify to use and do use the standard mileage rate can deduct 62.5 cents per business mile from July 1 through December 31, 2022. That’s up 4 cents a mile.
This brings up a practical question: what do you do if you track business mileage using the three-month sample method? What do you do if you track business mileage using the three-month sample method?
Three Month Basic Sample
As a reminder, here are the basics of how the IRS describes the three-month test:
1. The taxpayer uses her vehicle for business use.
2. She and other members of her family use the vehicle for personal use.
3. The taxpayer keeps a mileage log for the first three months of the taxable year, showing that she uses the vehicle 75 percent of the time for business.
4. Invoices and paid bills show that her vehicle use is about the same throughout the year.
According to this IRS regulation, her three-month sample is adequate for this taxpayer to prove her 75 percent business use.
Sample-Method Solution to New July 1 Mileage Rate
$12,100 (10,000 x 58.5 cents + 10,000 x 62.5 cents).
Mileage Record for the Full Year
If you have a mileage record for the entire year, no problem. Your record gives you the mileage for the first six months and the last six months.
Small Call to Action Headline
About Coach Janelle CPA
My passion is to help 6 & 7- figure+ earners see their financial possibilities through financial literacy and strategy.
I want to help you save on taxes so you can keep more of your money to live the life you dream of and have worked for NOW, and build wealth and equity for the next generation.
Sign Up To Our Weekly Newsletter
Get the latest tax planning tips content delivered straight to your inbox.
All Your Information is Protected When You Sign Up
Check Out Some Of Our Latest Blog Post
Self-Employment Taxes for Partners and LLC Members
Written by Coach Janelle CPA on August 20, 2022
Does a member of a limited liability company (LLC) or a partner in a partnership have to pay self-employment taxes on the member’s or partner’s share of the entity’s income? Incredibly, the answer is not alw...
Paying Your Child: W2 or 1099?
Written by Coach Janelle CPA on August 8, 2022
Here’s a question I received from one of my clients: “I will hire my 15-year-old daughter to work in my single-member LLC business, and I expect to pay her about $12,000 this year. Do I pay her through payroll checks and file a...
Transferring Your Home to Your Adult Child
Written by Coach Janelle CPA on August 1, 2022
With today’s home prices and the crazy real estate market, it’s likely difficult for your children to buy a home. And it’s conceivable that you are ready to move on from your existing home. If this is true, consider...
Selling Your Appreciated Vacation Home? Consider the Taxes
Written by Coach Janelle CPA on July 27, 2022
The tax-code-defined vacation home rules come into play when you have both rental and personal use of a home. Thus, you can have tax-code-defined vacation homes in the city, in the suburbs, and in recreati...
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@coachjanellecpa
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@coachjanellecpa
Follow me. Let's be friends!
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