Sunday, January 21, 2007

Tax and Legislative Updates

The IRS is raising the standard mileage rates for the year 2007 for automobile usage. The new rates are used to calculate the deductible costs of operating an auto for business use, charitable use and/or medical or moving purposes. Beginning with the start of this year, the mileage rates will be as follows:

48.5 cents per mile for business miles driven

20 cents per mile for medical or moving purposes

14 cents per mile for service to a charity

See IR-2006-168 and Rev. Proc. 2006-49 for more information

From the legislative forefront, the Senate is backing legislation that would provide around 8.3 billion in tax cuts for small businesses over the next 10 years. The details of the bill include increasing the minimum wage, and extend the Work Opportunity Tax Credit for five years. The bill would also provide favorable expensing provisions for small businesses allowing them to more quickly deduct costs associated with growing their business.

These are some of the many issues that will affect your small business in the year 2007 and beyond.

Keeping your Business N Synergy

Brian N. Stovall

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