Volunteer Day

So a couple of us went to volunteer for the Salvation Army Angel Tree Distribution and we just so happened got on the news attached is the link if you would like to view News Story.

Recently published Letter from Jeff Lovelady in Transport Topics

Updated: 11/28/2011 8:00:00 AM Letters: Taxes, Speed Limiting These Letters to the Editor appear in the Nov. 28 print edition of Transport Topics. Click here to subscribe today. Taxes Your Oct. 31 “Analysis” from The Associated Press, which was headlined “Small Business Tax Deduction to Shrink, Showing Importance of Year-End Planning” (p. 7), stated: “The maximum that can be deducted under the two deductions combined is $2 million.” If that refers to the section 179 deduction and the bonus depreciation deduction, the information is not accurate. There is no limit on bonus depreciation. The limit only applies to section 179, and the amount that can be deducted is $500,000 — and then it is limited dollar-for-dollar for every dollar the purchases for the year exceed $2 million. For example, if a company buys $2.2 million worth of trucks— assuming no trade-in — the company can take a $2.2 million bonus depreciation deduction, assuming the transaction meets all the requirements. If the company elects not to take bonus depreciation, then it can take a section 179 for $300,000 ($2.2 million minus $2 million limit equals $200,000, and $500,000 minus $200,000 equals $300,000) and then take the MACRS (modified accelerated cost-recovery system) three-year deprecation amount on the remaining $1.9 million. Also, keep in mind that if a company can enter into a binding contract, it can take 100% bonus depreciation on the equipment in 2012, as long as it either (1) has paid for the equipment if it is a cashbasis taxpayer or (2) has secured financing and recorded the liability if it is an accrual-basis taxpayer. So, if it is an accrual-basis taxpayer: Book the asset and the liability prior to Dec. 31, 2011, put the asset into service in 2012 and take 100% bonus depreciation on the asset in 2012. This is not available if it has followed the proper procedures in securing a contract to build or has paid for the equipment in 2011. This is only available to transportation assets and other qualified long-lived property. As always, consult your own advisers should you have questions. Jeff Lovelady CPA Bell & Company, Pa. North Little Rock, Ark.

Personal Use of Company Auto

Did you know if you use a company vehicle for personal use, that benefit is taxable compensation to you? The IRS requires that personal use of a company automobile be calculated for each person receiving the benefit. The calculation is based on the personal mileage compared to business mileage, a personal gas factor of 5.5 cents per personal mile, and the IRS guidelines for the annual lease value of employer-provided vehicles. Recent IRS audit information shows that personal use of company auto generally is found to be in the 20% to 30% range. Business mileage does not include commuting miles, so these need to be included in the personal use percent. Adequate records, such as mileage logs, must be kept to support business use. Any personal use is added to the employee’s W2 by issuing the employee a salary check. The employee will have Social Security and Medicare taxes withheld from the gross amount of personal use. Federal and state taxes are not required, but the employer may choose to withhold federal and state taxes. The employer is responsible for matching the Social Security and Medicare taxes and remitting any federal or state withholding on the personal use. If the employer does not withhold the income taxes, you will need to notify the employees so they can adjust any personal tax estimates for the consequences of the personal use. For more information on this topic contact Bethany Pusifull. Bethany.pursifull@bellandocmpany.net or call her 501.753.9700.