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Tax Tips Small Business

Employee Meals: When Does the 50-Percent Limit Apply?

Don't reduce your deduction if you aren't required to

In most cases, an employer is only allowed to deduct one-half of the expense that is paid to employees for meals. However, in some instances, the full amount is allowed.

Small Business Quick Tip

Instead of deducting the actual expenses for the business use of your vehicle, opt for the standard mileage rate. In 2008, you can deduct 50.5 cents for each business mile you drive (58.5 cents for each business mile you drive after July 1st).

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IRS Increases Mileage Rates through Dec. 31, 2008

WASHINGTON — The Internal Revenue Service today announced an increase in the optional standard mileage rates for the final six months of 2008. Taxpayers may use the optional standard rates to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes.

The rate will increase to 58.5 cents a mile for all business miles driven from July 1, 2008, through Dec. 31, 2008. This is an increase of eight (8) cents from the 50.5 cent rate in effect for the first six months of 2008, as set forth in Rev. Proc. 2007-70.

In recognition of recent gasoline price increases, the IRS made this special adjustment for the final months of 2008. The IRS normally updates the mileage rates once a year in the fall for the next calendar year.

Tax Tips Personal

Are You Putting Investments in Your Child's Name?

New rules tighten your options

Beginning with the 2006 tax year, children, under the age of 18 who have unearned income in excess of $1,700,are taxed at their parent'shigher rate. Previously,

Personal Quick Tip

Beginning January 1, 2008, the standard mileage rates for the use of a car (including vans, pickups, or panel trucks) are:

50.5 cents per mile for business miles driven (58.5 cents per mile for miles driven after July 1, 2008);
19 cents per mile for all miles driven for medical or moving purposes (27 cents per mile for miles driven after July 1, 2008); and
14 cents per mile for all miles drive for charitable purposes.