Safeguard your business vehicle deductions

 

When you use an automobile in your business and claim vehicle-related federal tax deductions, you typically have to follow recordkeeping rules that are more strict than the requirements for other business expenses. These tougher substantiation rules call for logs detailing the usage of the vehicle, including the date, mileage, and purpose of trips.

The substantiation rules also apply when your business owns or leases vehicles for the use of your employees. You can get copies of auto usage logs from your employees or rely on a statement from each employee as long as you know the information is based on a properly kept log.

Either way, your employee must keep the records, and you report a summarized version of the information on your business tax return, typically on Form 4562. Failure to follow the rules can mean automobile deductions are disallowed or treated as a taxable fringe benefit to employees.

In some cases, your business can qualify for a safe-harbor exception to the substantiation rules when employees use company-owned vehicles. For example, if you have a written automobile policy prohibiting all personal use of a vehicle, including commuting, and the vehicle is kept on company property when not in use, detailed mileage records may not be necessary.

Please call us for help setting up a recordkeeping system that will keep your business vehicle expenses deductible.

aconner@atconnercpa.com

Avoid payday loans

 

Most folks know the "in-between-paycheck" cash crunch. Your money runs out before the next paycheck rolls in. The car breaks down, the roof starts leaking, the daredevil child falls off his bicycle and lands in the emergency room with a broken arm. The bills need to be paid, but your bank account is running on empty.
Payday loan companies are glad to offer a solution. They open storefronts in strip malls — often in the city's poorest neighborhoods or near military bases — and may even provide access to loans via Internet websites. You can walk into a payday loan store with copies of your driver's license and current pay stub, and walk out with a check. If you apply online (providing similar proof of employment and identification), you can have funds deposited directly into your bank account, sometimes within the hour. The amount borrowed is typically due within two weeks.
But borrowing from a payday loan company is seldom a good idea. Consider these three disadvantages:

• Payday loans are extremely expensive. Taking out a cash advance on your credit card is considerably cheaper (though not recommended). A typical payday loan of $375 carries an average fee of $55. That works out to 15% interest over two weeks. Carried out to an annual percentage rate (APR), you're borrowing money at well over 300%. A typical cash advance on a credit card is around 25% APR.

• Payday loans don't address the underlying issues. Although payday loans alleviate financial stresses for a time, the causes behind those problems may remain unresolved. It's better to face financial problems head on. To bring expenses into alignment with income, it may be necessary to adjust your lifestyle or work a second job (at least until the financial picture improves).

• Payday loans can lead to a debt spiral. Loan companies make tremendous profits from repeat customers. Borrowers extend their payday loans, accumulate fees, and dig themselves into greater and greater debt. The short-term fix becomes a long-term habit. The better loan companies will try to assist you by limiting your borrowing.

If you find yourself strapped for cash, consider alternatives to payday loans. Ask family and friends for help. Work overtime or take a side job. Sell unused items. Eliminate unnecessary expenses. Contribute — perhaps only a small amount at first — to an emergency fund. Increase your earning potential by going back to school. Develop habits of financial discipline. And say goodbye to payday lenders.

aconner@atconnercpa.com

Domestic Violence Awareness Does Not End in October

Kitchen to Host Upcoming 'Mothers & Daughters Day'

PHILADELPHIA, Oct. 23, 2012 - State Sen. Shirley Kitchen, in conjunction with Community Empowerment Group, are hosting the 4th annual "Mothers & Daughters Day," a free informational event to raise awareness about domestic violence and offer resources to women in transition.

Women and young ladies ages 13 and older are invited to attend the event, which takes place on Saturday, Nov. 3, from 9:30 a.m. to 2 p.m., at the Student Faculty Center, Temple University Health Sciences Campus, 3340 N. Broad Street (corner of Broad and Ontario Sts.) Registration starts at 8 a.m. Women must register with their mother or daughter. Women are welcome to bring granddaughters, nieces, cousins and/or other female acquaintances. Metered street parking is available.

Participants will learn more about options and resources for women. There will be speakers, discussion groups, giveaways and special prizes. Continental breakfast and lunch will be served.

"The bond between women in the family, whether they are mothers and daughters, grandmothers and granddaughters, aunts and nieces, or mentor and mentoree, is extremely special," Kitchen said. "This event is meant to bring domestic violence to light and empower women and young ladies with resources and information on this issue so that they can live in a peaceful and loving environment."

Attendees will be able to take a commemorative photo of themselves between 8 and 9:15 a.m., so individuals are asked to arrive early to participate in the free photo shoot.

Registration is required. Call 267-736-8801 or register online at www.senatorkitchen.com

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Kentia Waters
Director of Communications
State Senator Shirley Kitchen's Office
1701 W. Lehigh Ave., Suite 104
Philadelphia, PA 19132
215-227-6161
Fax: 215-560-1316
kwaters@pasenate.com
http://www.senatorkitchen.com/

Domestic Violence Awareness Forum