When the new tax changes for 2011 and 2012 were signed into law on December 17, one of the items extended was the way to get rid of the so called “marriage tax penalty” which would have expired at the end of 2010. Prior to the Bush Tax Cuts, married people frequently paid more in taxes than their single counterparts. This was fixed by equalizing the standard deduction between married couples and singles and also equalizing the top of the 15% tax bracket. So now the marriage tax penalty is gone until 2013, and we will see what happens then.
Brian’s Tax Musings
While donating your time to charity is not a tax deduction, the cost of materials and out of pocket expenses are a deductible charitable donation expense. My daughter makes earrings and sells for a couple of dollars each. She is donating all the proceeds to charity. if she donated the earrings themselves, she would be able to deduct her costs to make the earrings as a charitable deduction. You can email me and we can discuss if you have a similar situation.bstonercpa@sbcglobal.net www.briantstonercpa.com
Brian’s Tax Musings
Sorry I didn’t blog on Memorial Day – had to clean out my father-in-law’s house (he is moving and sold his house with a 30 day escrow). I wish we had a picnic instead. Back to the blog:Is it better to take actual auto expenses or the IRS Mileage rate for a business deduction?It will depend on:*How accurate is your mileage log? (You have to start with something)*How many miles did you drive? (Sometimes more miles works in favor of the mileage rate)*Are you leasing or buying your car? (Leasing can sometimes give you bigger deductions)*How old is your car? (The mileage rate can yield bigger deductions on an older car)Perhaps you should ask your tax professional (or me) and he can look at your individual situation and see which works best.