IRS 2017 Mileage Rates

The mileage rates are going down for 2017 from 2016. Business miles are going from 54 cents a mile to 53.5 cents per mile. Medical or moving mileage is going to 17 cents per mile from 19 cents for 2016. The charitable rate is unchanged at 14 cents per mile and is set by statute so it rarely changes. Taxpayers have the option of using actual costs  of using their vehicles including depreciation rather than the standard mileage rates. In my opinion it usually is not worth the effort to keep up with actual costs except when you use your vehicle over 50% for business.

Funding a Health Savings Account (HSA)

You can make a one time nontaxable transfer of funds from your IRA to your HSA. It has to be made directly by the trustee of the IRA to the HSA. On the tax return you report the IRA distribution on line 15a and 0 (the taxable part) on line 15b and write HFD next to line 15b.

Tax Debts Over $50,000

At a seminar recently I learned that you will be stopped at the airport and your passport taken away if you owe over $50,000 to the IRS. So clear up any tax debts before you decide to go on an international trip.

12 Ways to Reduce Your Taxes for 2016 Right Now

What can you do this month to lower your 2016 income taxes? Time is running out but you can still take the following actions:

1. Make donations of clothing and household items to Goodwill. Keep the receipt and a record of items donated and use the valuation guide at salvationarmyusa.org to value the donation.
2. Organize your tax documents and deductions in one file folder for the year.
3. If you have a business on the cash basis, delay mailing bills until late December so that the payments won't be received until 2017. Pay your January business rent in December and buy office supplies. Buy and place into service office equipment.
4. Sell investments with losses so that you can offset any capital gains plus $3,000.
5. Now is the time to write a check to your favorite charity.
6. Pay your fourth quarter estimated state taxes by 12/31/16.
7. Increase your 401(k) contributions. This year workers can contribute up to $18,000 and $24,000 if you are at least 50.
8. Consider taking cash from your Roth if you need funds instead of from your pretax retirement account.
9. Invest in a conservation easement. It may be possible to get up to a 4 to 1 charitable contribution write off of the amount invested.
10. Donate appreciated stock to charity.
11. Do a qualified direct contribution of your required minimum distribution from your retirement account to charity.
12. If you are 62, house rich, and cash poor, consider a reverse mortgage to provide a source of tax free funds.