Do you have a family disaster recovery plan? We live in Florida with hurricanes, wildfires and flooding,, plus an occasional tornado.
With these threats, you need one. Visit www.floridadisaster.org/family to create your family disaster recovery plan.
Once it is done, scan it into the computer and save it in your Profile on The DocSafe.
Not too many people give any thought to their choice of state residency relative to the estate tax. Sure, plenty of folks decide to live in states like Florida because we have no income tax (although anyone who lives here knows that you get taxed in many other ways – high sales tax, license fees, etc). How about deciding where to live based on potential estate tax?
Most of us know by know that the federal estate tax exemption is large. $5.12 million for 2012, up from $5 million in 2011, due to indexing for inflation. What about state estate tax exemptions? Before 2005, Florida had an estate tax that was often called the “sponge” or “pick-up” tax, which was the amount that was allowed as a state estate tax deduction on the federal estate tax return. For the time-being, there is no state estate tax deduction allowed on the federal estate tax return, which means that Florida does not collect an estate tax.
Many other states followed that rule, so that their tax revenues took a dip. To address that, certain states enacted a stand alone estate tax. You can review this map to learn about those exemptions, and perhaps pick your new state of residence. For more information, this Forbes/MSN article is worth a quick read.
In recent year-end planning meetings, several of my business-owner clients asked their accountants if they could “find” more deductions. Legitimate ones, of course.
Here’s one that is often goofed up by taxpayers, but could result in worthwhile tax savings. If you drive your vehicle for business, you are entitled to take deductions using two different methods. Many advisers suggest considering both methods to figure out which will produce a bigger deduction.
The first method involves calculating the actual costs of using your vehicle, which include oil, gas, tolls, depreciation, licenses, lease payments, insurance and repairs. If you want to use this method, you have to keep a detailed log of your expenses. This log needs to include miles driven for business use versus for personal use. You can then multiply your total expenses by the percentage of time driving your car for business use (unless you can otherwise show through your record-keeping that certain expenses related exclusively to business use). More information can be found in IRS publication 463.
The second option is to use the standard mileage rate issued by the IRS each year. For 2012, business use of vehicles will result in a deduction of 55.5 cents per mile, the same rate as the second half of this year. For many of us, this standard mileage rate is easier to keep track of, because you simply have to keep a log of miles driven for business. if you are a business owner, this means that your company can reimburse you for this amount, which results in a tax deduction for the business.
In either case, it is important to think about what it means to drive your car for business. Your commute to and from your home to your office does not count. Instead, driving from one office to another or from one job site to another would count.
