Deductions and Write-Offs

Interest Rates for Q1, Q2 and Q3 for 2013 will continue to be charged as follows:
3% for overpayments (2% for corporations)
3% for underpayments
5% for large corporate underpayments
0.5% for the portion of a corporate overpayment in excess of $10k.
Under the Internal Revenue Code, the rate of interest is determined on a quarterly basis. For taxpayers other than corporations, the overpayment and underpayment rate is the federal short-term rate plus 3 percentage points. Generally, in the case of a corporation, the underpayment rate is the federal short-term rate plus 3 percentage points and the overpayment rate is the federal short-term rate plus 2 percentage points. The rate for large corporate underpayments is the federal short-term rate plus 5 percentage points.
The rate on the portion of a corporate overpayment of tax exceeding $10,000 for a taxable period is the federal short-term rate plus one-half (0.5) of a percentage point. Further, the federal short-term rate that applies during the third month following the taxable year also applies when determining estimated tax underpayments during the first 15 days of the fourth month following the taxable year

You can donate unproductive inventory to a registered charity and claim a federal income tax deduction. Examples of unproductive inventory include slow sellers and nonmoving and discontinued stock.

The standard mileage rate(s) for 2013 is .14

Beginning on Jan. 1, 2012, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be 23 cents per mile driven for moving purposes.

Interest is earned over 30 years. You do not have to report the interest income until you cash in the bond or it reached its final maturity, whichever comes first. When you do the interest is subject to federal income tax but exempt from state and local tax.
You cannot cash the bond in until 6 months of ownership. If you cash it in after you have owned it for less than five years you will forfeit 3 months of interest.
The Bureau of the Public Debt announced today that as of January 1, 2012, paper savings bonds will no longer be sold at financial institutions.
This action, which supports the U.S. Department of the Treasury's goal to increase the number of electronic transactions with citizens and businesses, will save American taxpayers approximately $70 million over the first five years. But savings bonds, introduced in 1935, are not going away. Electronic savings bonds in Series EE and I will remain available through purchase in TreasuryDirect®, a secure, web-based system operated by Public Debt – where investors have been purchasing savings bonds, available 24/7, since 2002.

15 year property includes any municipal wastewater treatment plant, any telephone distribution plant and comparable equipment used for 2-way exchange of voice and data communication, any qualified restaurant property that is a building, any qualified leasehold improvement property, any section 1250 property that is a retail motor fuels outlet whether or not food or other convenience items are sold there, initial clearing and grading land improvements for gas utility property, certain electric transmission property.

Residential rental property consisting of a building in which 80% or more of the total rent is from dwelling units is considered 27.5 year property.
It also includes manufactured homes that are residential rental property and elevators and escalators.

Nonresidential real property is real property that is not residential real property or property with a class life of less than 27.5 years.
For nonresidential real property placed in service after 1986 and before 5/13/93 the cost is to be recovered over 31.5 years not 39.

Your dependent care flexible spending account reimbursement does reduce your maximum child care base expense amounts of $3,000 or $6,000 (2 or more children) claimed on IRS Form 2441.