Business Auto Mileage Rate Increase

The IRS has announced the following increases in the stanadard mileage rates beginning July 1, 2011:

Mileage Rate Changes

Purpose	Rates 1/1 through 6/30/11	Rates 7/1 through 12/31/11
Business	51	55.5
Medical/Moving	19	23.5
Charitable	14	14

The information is from IRS Announcement 2011-40.

Tax law can change daily, please talk to your tax adviser before making decisions that will affect your taxes.

Business Paid Education

If you need to take a course (or courses) or class (or classes) in or to maintain or imporve your skills to maintain your status or pay level or if you need to takes these courses or classes for the purpose of meeting legal or employer requirements your employer may be able to deduct the expenses.





The business is not able to deduct expenses that enable you to be qualified for the job or that would qualify you for a new trade or business (a new job). 





As with all business expenses, they must be considered "ordinary and necessary" in order to be deductible and as far as educational expenses are concerned they must also be "required".  The key, as with all deductions is that you document your reasoning.  The expenses must be directly related to your current employment.  Just because taking the course or having this knowledge is "appropriate or helpful" does not make it "required, necessary or ordinary".  Just because the employer adds a line to your employment contract stating it's a requirement does not make it "ordinary or necessary".





It is even more to your advantage to carefully document the FACTS, proving that the education is required, ordinary and necessary for your current job and not a new job, trade or business.  It does not matter if you do not intend on getting a new job, or starting a new trade or business.  It does not intend on your reasons for taking the new courses.  





For example the tax courts have allowed taxpayers with finance degrees, management and marketing degrees to deduct the expenses related to getting an MBA, if and when the taxpayer is involved in the same aspect of the business that they were involved in prior to obtaining the MBA on the basis that the taxpayer showed that these courses "enhanced and maintained their skills".  





On the other side of the coin, the tax court disallowed an aeronautical engineer the ability to deduct the cost of obtaining his commercial pilot's license even though the engineer was easily able to show that the education did improve his knowledge of aeronautical engineering.  The expenses were disallowed because he was now able to get a job as a commercial pilot - it didn't matter that he didn't want to.





As with all contested expenses they are often "won or lost" based on the taxpayer's substantiation of the deduction.

Tax law can change daily, please talk to your tax adviser before making decisions that will affect your taxes.

5 things you should know about tax collector bonds

As taxpayers, we all want to know that our taxpayer dollars are allocated appropriately rather than being mishandled by corrupt officials. Tax collector bonds help protect against potentially unruly tax officials in five key ways.

1. Tax collector bonds are legally binding contracts.

Tax collector bonds function as do other surety bonds. Each bond that's executed provides a financial guarantee that a specific job will be done according to applicable regulations. Tax collector bonds bind three separate entities together in a legally binding contract.

• The principal is the tax collector that purchases the bond as a promise that work will be completed appropriately.


• The obligee is the entity that requires the principal to purchase a bond as a way to deter fraud and potential financial loss.


• The surety is the insurance company or specialty surety agency that issues the bond as a financial guarantee of the tax collector's ability to do the job.

2. Tax collector bonds protect consumer interests.

As a specific type of surety bond, tax collector bonds provide protection to consumers. They're primarily used to guarantee the general public that hired or elected tax collecting officials will perform their duties appropriately. Government agencies establish surety bond regulations to deter fraudulent or otherwise unethical individuals from getting the position.

3. Tax collector bonds deter unqualified individuals from getting control of taxpayer money.

Before surety providers issue tax collector bonds, they always conduct thorough background checks of all applicants. To determine a tax collector's credibility, surety providers investigate the applicant's credit scores, financial records and work histories. Negative feedback will deter sureties from issuing a bond, as they tend to avoid bonding potentially risky principals.

4. Tax collector bonds guarantee that collectors will do their job appropriately.

Because tax collectors have access to a significant amount of taxpayer money, they need to be held accountable for their actions. If a tax collector fails to complete the duties of that position according to law, tax collector bonds provide a safety net for the governing agency. This prevents tax collectors from taking advantage of their position's power.

5. Tax collector bonds provide compensation if a tax collector should break the law.

If a tax collector breaks the law or otherwise fails to perform duties, tax collector bonds allow obligees or other harmed parties to collect on the bond. This enables government agencies and the general public to recover funds that were lost as a result of a tax collector's negligence.



This article was provided by Kristen Bradley of SuretyBonds.com, a nationwide surety bond producer. Because the surety industry is often misunderstood, SuretyBonds.com provides educational resources to the general public to help them understand the benefits provided by surety bonds.

Tax law can change daily, please talk to your tax adviser before making decisions that will affect your taxes.