Tax

Every business owner, no matter how small, must keep good records. But whether it’s keeping track of mileage, documenting expenses, or separating personal from business use, keeping up with paperwork is a seemingly never-ending job.

No matter how good your intentions are in January, the chances are good that by now that paper mileage log is looking a bit empty. Even worse, you could be avoiding tracking your mileage altogether–and missing out on tax deductions and credits that could save your business money at tax time.

The good news is that there are a number of phone applications (apps) that could help you track those pesky business miles. Most of these apps are useful for tracking and reporting expenses, mileage and billable time. They use GPS to track mileage, allow you to track receipts, choose the mileage type (i.e., business, personal), and produce formatted reports that are easy to generate and share with your CPA, EA, or tax advisor.

Here are three popular apps that help you track your business mileage (and more):

1. TripLog – Mileage Log Tracker

Works with: Android and iPhone

What it does: Tracks vehicle mileage and locations using GPS

Useful Features:

• Automatic start when plugged into power or connected to a Bluetooth device and driving more than five mph
• Reads your vehicle’s odometer from OBD-II scan tools
• Syncs data between the web service and multiple mobile devices
• Supports commercial trucks including per diem allowance, state-by-state mileage for IFTA fuel tax reports, and DEF fuel purchases and gas mileage

2. MileIQ

Works with: Android and iPhone

What it does: Keeps track of mileage for business or personal use

Useful Features:

• Budget-friendly automatic mileage tracking
• Easy to categorize trips – swipe right for business trips; swipe left for personal trips
• Ability to create customized weekly mileage reports
• Premium Office 365 subscribers can log unlimited drives every month.

3. Hurdlr

Works with: Android and iPhone

What it does: Tracks mileage, as well as expenses and income streams

Useful Features:

• Tracks business mileage using auto start and stop
• View real-time finances, profits, and tax savings
• Links to financial accounts, PayPal, Uber, and others
• Creates financial reports and spreadsheets you can send to your CPA

If you have any questions about using apps that track business mileage or need help choosing the right one for your business needs, don’t hesitate to call.

• By Leon Clinton
• October 25, 2018

For tax years prior to 2018, employees could exclude from income moving expenses reimbursed or paid by an employer. However, due to the passage of the Tax Cuts and Jobs Act (TCJA) last year, this tax provision has been suspended starting this year. This means, that going forward, these amounts are considered taxable income with one exception: amounts reimbursed to active-duty members of the U.S. Armed Forces whose moves relate to a military-ordered permanent change of station.

However, the IRS recently clarified that payments or reimbursements made by employers in 2018 for employees’ moving expenses incurred in 2017 (or prior years) will be excluded from the employee’s wages for income and employment tax purposes. This holds true if the employer pays a moving company in 2018 for qualified moving services provided to an employee prior to 2018 as well.

To qualify, reimbursements or payments must be for work-related moving expenses that would have been deductible by the employee if the employee had directly paid them prior to January 1, 2018. That is, the employee must not have deducted them in 2017. Employers that have already treated reimbursements or payments as taxable should follow the normal employment tax adjustment and refund procedures.

Please call the office if you have any questions about this topic.

• By Leon Clinton
• October 23, 2018

The IRS is offering tax relief to any area designated by the Federal Emergency Management Agency (FEMA), as qualifying for individual assistance. Currently, this only includes parts of North Carolina, but taxpayers in additional localities (and states) may be added to the disaster area later and will automatically receive the same filing and payment relief. Taxpayers may call the office or visit the disaster relief page on the IRS website to check the current list of eligible localities.

The tax relief postpones various tax filing and payment deadlines that occurred starting on September 7, 2018, in North Carolina. Businesses and individual taxpayers affected by Hurricane Florence in North Carolina and elsewhere have until January 31, 2019, to file certain individual and business tax returns and make certain tax payments that were originally due during this period. These tax payments include quarterly estimated income tax payments due on September 17, 2018, and the quarterly payroll and excise tax returns that are normally due on September 30, 2018.

Taxpayers who had a valid extension to file their 2017 return due to run out on October 15, 2018, will also have more time to file. Businesses with extensions also qualify for the additional time including those who were expected to file calendar-year partnerships (i.e., those whose 2017 extensions run out on September 17, 2018). Penalties on payroll and excise tax deposits due on or after September 7, 2018, and before September 24, 2018, will also be abated as long as the deposits are made by September. 24, 2018.

The IRS automatically provides filing and penalty relief to any taxpayer with an IRS address of record located in the disaster area. Thus, taxpayers need not contact the IRS to get this relief. However, if an affected taxpayer receives a late filing or late payment penalty notice from the IRS that has an original or extended filing, payment or deposit due date falling within the postponement period, the taxpayer should call the number on the notice to have the penalty abated.

Tax relief is part of a coordinated federal response to the damage caused by severe storms and flooding and is based on local damage assessments by FEMA. If you have any questions or need assistance, don’t hesitate to call.

• By Leon Clinton
• October 21, 2018