IRS Standard Mileage Rates

Each year the IRS updates the mileage reimbursement rates. Effective January 1, 2016, the standard mileage reimbursement rate for the use of a car, van, pick-up, or panel truck in connection with a business will be 54 cents per mile. For medical treatment or moving expenses related to a job relocation, the reimbursement rate is 19 cents per mile. Miles driven in service of charitable organizations will be reimbursed at 14 cents per mile.

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What is an offer in compromise (OIC)?

For tax years before 2006, you must be in full compliance will all filing and payment requirements before completing an application for OIC. This means that you must have had filed your returns on time and if any taxes were owed in the past, payments were made on time.

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Are members of an LLC required to pay estimated tax and self-employment taxes on their share?

A single member LLC is viewed under the same conditions as a sole proprietorship for the purposes of taxes. LLC’s with two or more members are viewed as a partnership. As with any business, the business owner does not withhold employment taxes from his earnings to account for employment taxes. Because of this, LLC members must pay self-employment taxes. Silent members are not considered self-employed by the company, so they owe no self-employment taxes, regardless of owning a share. However, silent members are responsible for paying income taxes on any share distributions that they do receive from the company.

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What are the tax consequences of a forgiven loan made to a family member?

A family member who voluntarily forgives a loan over $14,000 is considered to be gifting the value of the loan to the recipient. There are no tax consequences to the borrower of the money if the lender (family member) forgives the loan. However, if the lender was charging interest and the borrower defaulted on the loan then the borrower will experience tax consequences.

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What are my tax responsibilities after I die?

Upon death, the deceased taxpayer’s tax year ends for income tax filing purposes and a new entity emerges for tax purposes which is called the estate. At the federal level, it is necessary to complete certain forms. At the state level, it is the responsibility of the estate’s executor or administrator, also known as personal representative of the estate, to file a state income tax return for the deceased taxpayer and for the estate during the probate period.

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State Income Taxes: Washington Remains 1 of Only 7 Income Tax-Free States

Almost every state has an income tax, but there remain seven holdouts: Alaska, Florida, Nevada, South Dakota, Texas, Washington, and Wyoming. The November 2, 2010 election saw an initiative on the ballot in Washington that would have implemented a statewide personal income tax on individuals making over $200,000 and couples filing jointly who make over $400,000. It failed handily – 65% to 35%.

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