Interesting Tax News!

[smspamperedchef]

This is what I received from our Nat. Exec. Dir. Carol Radu. This is VERY interesting information!

· With the price of gas you might be wondering whether or not it’s worth it to drive to a cooking show or to your sales meeting. Don’t wonder anymore! The following is something that has been floating around online for a while so you might have seen it already. If not, it’s BIG so pay attention! The tax rebate on mileage for 2008 is 50.5 cents per mile. If your car gets 15 miles to the gallon, you will be allowed to deduct $7.57 per gallon of gas. If a gallon of gas costs you $4.00 to drive to your shows, you’ll come out way ahead of driving to a job at a mall or at the grocery store!
__________________

[ChefJWarren]

Check this out!!!

IRS hikes business-mileage deduction rate
Higher fuel costs prompt unusual mid-year change for second half of 2008
By Andrea Coombes, MarketWatch
Last update: 4:23 p.m. EDT June 23, 2008Comments: 4SAN FRANCISCO (MarketWatch) -- The rising cost of gas prompted the IRS to increase the standard mileage-rate deduction for business-related driving for the second half of 2008, the tax agency announced Monday.
The rate will increase to 58.5 cents a mile, up 8 cents from 50.5 cents a mile now, for business miles driven from July 1 through Dec. 31 this year, the IRS said.
Generally, the IRS changes the rate just once annually, but gas costs prompted a mid-year hike this year. The average national price for a gallon of unleaded regular was $4.10 on Friday, according to the Lundberg Survey of 7,000 U.S. retail outlets. See full story.

[ChefJWarren]

Its going up even further for July 1-December 31! That is awesome!

P.S. I tried to paste the story, but obviously didn't do it right.

[dannyzmom]

Great News!!

[DessertDivaFL]

This is wonderful! God bless the people who are looking out for us!

[heather223]

WHO HOO! This is great.

[lkprescott]

Check this out!!!

IRS hikes business-mileage deduction rate
Higher fuel costs prompt unusual mid-year change for second half of 2008
By Andrea Coombes, MarketWatch
Last update: 4:23 p.m. EDT June 23, 2008Comments: 4SAN FRANCISCO (MarketWatch) -- The rising cost of gas prompted the IRS to increase the standard mileage-rate deduction for business-related driving for the second half of 2008, the tax agency announced Monday.
The rate will increase to 58.5 cents a mile, up 8 cents from 50.5 cents a mile now, for business miles driven from July 1 through Dec. 31 this year, the IRS said.
Generally, the IRS changes the rate just once annually, but gas costs prompted a mid-year hike this year. The average national price for a gallon of unleaded regular was $4.10 on Friday, according to the Lundberg Survey of 7,000 U.S. retail outlets. See full story.


cool... they did this mid-year hike before a few years ago. Made it a bit weird to keep track of but is handy that they hike it up to reflect the rising costs.

[KellyTheChef]

Thanks Sharon and Jessica!

I just forwarded all of this info to my clustermates!!

:)

[legacypc46]

This is great news. I happened to run into my tax accountant at lunch and we were both smiling!

[pamperedpals]

We were just notified at work that the mileage reimbursement rate was going up in July.

[Flamingo]

Do we need to change this manually on PPP or will it update automatically?????????????

[chefdiana2007]

Do we need to change this manually on PPP or will it update automatically?????????????

OOOOHHHH, good question. I drive every day and get paid travel, but I haven't gotten the official memo yet, and I drive about 1000 miles per month. This will help:sing:

[dannyzmom]

I know on PP we need to change it manually - not sure about on P3 though.

[JAE]

341 miles (to and from my aunt's home) = $199.52 in gas/mileage deduction
Gas probably cost me $62.93
What if the show ends up being $300 and my commission is $66 because it's the only show in July? I am in this to make money, not beat the tax system. Even if the show is $500 my commission is $110, meaning after I pay for gas I get $47.07. Not sure the time and wear and tear on my car is worth it. Am I missing something? (Very likely because I'm not always all here. KWIM?) I told my aunt that I would send her catalogs for a catalog show.

I just did a show for my sister, and we were both surprised that sales were barely $400.
Miles were 127 = $64.14 in tax deduction
$96.42 commission (maybe $100.80 depending on how my month turns out)
$32.28 left after deduction, not including catalogs/order forms/host gift/etc.
It's worth it because it's my sister, but I'm not sure I'd want to do this for anyone else.

Don't get me wrong. I'm glad the deductions are higher. I'm just not sure it's enough motivation to drive more than 100 miles round trip. That's even a bit far.

[Kitchen Diva]

This is what I received from our Nat. Exec. Dir. Carol Radu. This is VERY interesting information!

· With the price of gas you might be wondering whether or not it’s worth it to drive to a cooking show or to your sales meeting. Don’t wonder anymore! The following is something that has been floating around online for a while so you might have seen it already. If not, it’s BIG so pay attention! The tax rebate on mileage for 2008 is 50.5 cents per mile. If your car gets 15 miles to the gallon, you will be allowed to deduct $7.57 per gallon of gas. If a gallon of gas costs you $4.00 to drive to your shows, you’ll come out way ahead of driving to a job at a mall or at the grocery store!
__________________


Did you know that is just a guideline and businesses don't have to reimburse you that full amount? However for us, being self employed we can do that, but for example my company- when I travel- we only get reimbursed for .43 cents per mile. :(

[chefann]

Did you know that is just a guideline and businesses don't have to reimburse you that full amount? However for us, being self employed we can do that, but for example my company- when I travel- we only get reimbursed for .43 cents per mile. :(

With the price of gas you might be wondering whether or not it’s worth it to drive to a cooking show or to your sales meeting. Don’t wonder anymore! The following is something that has been floating around online for a while so you might have seen it already. If not, it’s BIG so pay attention! The tax rebate on mileage for 2008 is 50.5 cents per mile. If your car gets 15 miles to the gallon, you will be allowed to deduct $7.57 per gallon of gas. If a gallon of gas costs you $4.00 to drive to your shows, you’ll come out way ahead of driving to a job at a mall or at the grocery store!

Two different things - reimbursement is a company policy; deductions are a business expense on taxes.

[Kitchen Diva]

Two different things - reimbursement is a company policy; deductions are a business expense on taxes.

I'm gonna start calling you the Great and Wonderful Oz...because yer so smart! :)

[ChefMary412]

Does this price change automatically change in P3? That is how I have been keeping track of millage.

[chefann]

I don't think it does, because I remember having to change it to the new 50.5¢ rate at the beginning of the year.

[KellyTheChef]

341 miles (to and from my aunt's home) = $199.52 in gas/mileage deduction
Gas probably cost me $62.93
What if the show ends up being $300 and my commission is $66 because it's the only show in July? I am in this to make money, not beat the tax system. Even if the show is $500 my commission is $110, meaning after I pay for gas I get $47.07. Not sure the time and wear and tear on my car is worth it. Am I missing something? (Very likely because I'm not always all here. KWIM?) I told my aunt that I would send her catalogs for a catalog show.

I just did a show for my sister, and we were both surprised that sales were barely $400.
Miles were 127 = $64.14 in tax deduction
$96.42 commission (maybe $100.80 depending on how my month turns out)
$32.28 left after deduction, not including catalogs/order forms/host gift/etc.
It's worth it because it's my sister, but I'm not sure I'd want to do this for anyone else.

Don't get me wrong. I'm glad the deductions are higher. I'm just not sure it's enough motivation to drive more than 100 miles round trip. That's even a bit far.

I think you are looking at it backwards...

Your commission is about $100
Your deduction is 64.14 which means you would only be CLAIMING AS INCOME the $32 as what you made. You know that you actually made more than that. The way I look at it, the deduction is "extra" money we make, once you subtract your actual gas costs and wear and tear costs.

Still...100 miles round trip is a lot. Make sure you factor in your time spent to see if you really want to do it.

I see what you are saying, though. You don't want to wait till tax time to "see" the money, huh?

Clear as mud?!! :blushing:

[PampMomof3]

This is what I received from our Nat. Exec. Dir. Carol Radu. This is VERY interesting information!

· With the price of gas you might be wondering whether or not it’s worth it to drive to a cooking show or to your sales meeting. Don’t wonder anymore! The following is something that has been floating around online for a while so you might have seen it already. If not, it’s BIG so pay attention! The tax rebate on mileage for 2008 is 50.5 cents per mile. If your car gets 15 miles to the gallon, you will be allowed to deduct $7.57 per gallon of gas. If a gallon of gas costs you $4.00 to drive to your shows, you’ll come out way ahead of driving to a job at a mall or at the grocery store!
__________________

Check this out!!!

IRS hikes business-mileage deduction rate
Higher fuel costs prompt unusual mid-year change for second half of 2008
By Andrea Coombes, MarketWatch
Last update: 4:23 p.m. EDT June 23, 2008Comments: 4SAN FRANCISCO (MarketWatch) -- The rising cost of gas prompted the IRS to increase the standard mileage-rate deduction for business-related driving for the second half of 2008, the tax agency announced Monday.
The rate will increase to 58.5 cents a mile, up 8 cents from 50.5 cents a mile now, for business miles driven from July 1 through Dec. 31 this year, the IRS said.
Generally, the IRS changes the rate just once annually, but gas costs prompted a mid-year hike this year. The average national price for a gallon of unleaded regular was $4.10 on Friday, according to the Lundberg Survey of 7,000 U.S. retail outlets. See full story.

Thanks Ladies! this is wonderful news!

[JAE]

I think you are looking at it backwards...

Your commission is about $100
Your deduction is 64.14 which means you would only be CLAIMING AS INCOME the $32 as what you made. You know that you actually made more than that. The way I look at it, the deduction is "extra" money we make, once you subtract your actual gas costs and wear and tear costs.

Still...100 miles round trip is a lot. Make sure you factor in your time spent to see if you really want to do it.

I see what you are saying, though. You don't want to wait till tax time to "see" the money, huh?

Clear as mud?!! :blushing:
No, I get what I only have to claim, but yes, I don't want to wait until tax time to reap the "benefits". It's sort of along the lines of getting a mortgage just to deduct the interest. You're still in debt up to your ears! KWIM?

[KellyTheChef]

No, I get what I only have to claim, but yes, I don't want to wait until tax time to reap the "benefits". It's sort of along the lines of getting a mortgage just to deduct the interest. You're still in debt up to your ears! KWIM?

Yeah...after I wrote my post, the more I thought about it, the more I understood your position.

I am still gonna look at this mileage increase as a GOOD THING...since we have no control over gas prices!

[koima]

Keep in mind that your car costs money to drive and gas isn't the only expense. Repairs, depreciation, and maintenance are all included in that amount. There are two ways to count mileage/auto expenses: the per mile way, and the actual use way. If your car is particularly expensive to drive, it may be be better to do the actual use method. You keep track of all the expenses of your car and what percentage of the car use is for business, then deduct that percentage.

My husband owns a small business and we do the actual use method on his truck because it costs smore than $.58/mile for him to keep it in good operating condition. We write off EVERYTHING on that truck - oil changes, regular tune ups, car washes, he gets the premium gas so it runs better, you get the idea. This year he replaced the tires and had a moderately pricy engine repair, and those costs were deductible. If we were just charging mileage, we might not have covered those expenses.

Once you pick a method for your company, you can't change it, though. I'm not an accountant, so if your car is especially pricy (over and above the outrageous cost of gas!) you might want to look into the actual use method at the IRS website or with an accountant.

[cookingwith_tara]

I always looked at it this way - please tell me if i"m wrong.

To me a deduction is sort of like a credit. It's taken away from whatever I might owe at the end of the year. The more deductions I have the higher my credit meaning, to me, it can out weigh what I owe giving me more of a return.

[koima]

Well, tax deductions and tax credits are different, but it's a similar idea. They both take money off of your taxable income.

A tax credit is worth more to you than a tax deduction. A tax credit is a dollar-for-dollar reduction in your tax liability. A $100 tax credit means that you will pay $100 less tax, no matter what tax bracket you are in. A $100 deduction on the other hand saves you only a percentage of the $100. The amount you save depends on your tax bracket. In the 28% bracket, a $100 deduction would reduce your taxes by $28.

(We just finished our corporate taxes for DH's business. Can you tell I'm knee deep in tax lingo?)