Not only are we CPA certified, now we are also CPR certified. Kopsa Otte provided free CPR Training to our staff on two separate evenings last week. It was held in our conference room, and was led by an instructor from the local hospital.
R.M., I hope you have a great trip. Travel costs are generally deductible for trips you take on behalf of your trade or business. Here are the general rules:
You're "traveling" when you're away from home overnight or long enough to need sleep.
These rules generally limit your business deductions to bona fide business trips -- not vacations disguised as business trips. But you can still take generous business deductions for trips including some personal time. We recommend you keep a log or diary of your business time so you can substantiate whatever deduction you claim.
Want to write off weekends? You can treat them as business days if they fall between business appointments or if you stay over (before or after your business time) to qualify for airline "Saturday Stay" discounts. (Low airfares once meant the end of those Saturday requirements -- but $140/barrel oil, along with new fees for checked bags and peanuts, look likely to bring them back.)
Travel deductions aren't especially complicated -- if I had more information about your plans I could give you a more precise answer. Let me know if I can be of more assistance.
Larry Kopsa CPA
I think we all know that the Farm Act has now been signed into law. What you may not know is there are some tax provisions associated with the Farm Act. Here are a few of the items I thought you might be interested in:
CONSERVATION RESERVE PROGRAM PAYMENTS
There has been controversy over the last several years of whether or not a farmer needed to pay social security tax on CRP payments. This is bouncing around between the IRS and the courts, and before the act, the IRS had ruled successfully that you had to pay Social Security tax on CRP payments, even if you were not a farmer or were retired. Now, this is all changed. The act provides that CRP payments received by retired or disabled individuals, who are getting Social Security, retirement, or disability payments are not subject to the self-employment tax income for self-employment tax purposes. This is effective for payments after 2007.
FARM LOSS CARRYBACKS
The new law tightens up farm losses if you are receiving large amounts of program payments. The law states that for any year a taxpayer other than a C corporation receives subsidies through CCC loans, countercyclical payments, or payments in lieu of that, the losses are limited to the greater of $300,000 or the total income from the farm for the prior five years. Any additional loss is carried forward to the next year.
SELF EMPLOYMENT TAX
One really good change to the law is that it modified the optional methods so that electing taxpayers will be eligible to secure four credits of social security benefit coverage for each tax year by increasing the indexing of the dollar thresholds. In the past, a farmer was only able to receive one quarter of coverage. Therefore, farmers with losses would eventually not be eligible for disability.
There are other tax provisions to the act. I will list them, and if you are interested in them please let me know, and I would be glad to get you more information. I do not include the detail in the blog due to fact that this would only affect a minority of farmers.
Again, if you have any questions on these, please feel free to contact me.
Larry Kopsa CPA
The United States has 5% of the population but 70% of the attorneys that file 90% of the lawsuits. 350,000 lawsuits are filed weekly in the U.S. Larry Kopsa CPA
