Car Expenses

Anonymous asks:  If I have to use my car for work, can I write off things like depreciation, insurance and maintenance?

Deb answers:  Yes you can!  The IRS lets you choose to use their standard mileage rate or your actual expenses.  

As of  Jan. 1, 2010, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) are:

• 50 cents per mile for business miles driven
• 16.5 cents per mile driven for medical or moving purposes
• 14 cents per mile driven in service of charitable organizations

The new rates for business, medical and moving purposes are slightly lower than last year’s. 

If you were reimbursed by your employer for business miles driven at a lower rate than what the IRS allows, you might be able to deduct the difference. 

Child Tax Credit

Amanda asks: My daughter turned 17 in February, I heard a rumor that I cannot claim the Child Tax Credit for her this year.  Is that true?

Deb answers: Amanda, thanks for the great question! Yes, it is true, your daughter will not qualify for the Child Tax Credit in 2010.  There are a number of criteria for claiming the Child Tax Credit in 2010 and one of them is that your child must be 16 or younger on December 31, 2010.  Obviously, Uncle Sam has never raised a teenager!  Copy and paste this link to get the full details straight from the IRS.
http://www.irs.gov/publications/p972/ar02.html#en_US_2010_publink100012085

Qualifying Child

A qualifying child for purposes of the child tax credit is a child who:

1. Is your son, daughter, stepchild, foster child, brother, sister, stepbrother, stepsister, or a descendant of any of them (for example, your grandchild, niece, or nephew),
2. Was under age 17 at the end of 2010,
3. Did not provide over half of his or her own support for 2010,
4. Lived with you for more than half of 2010 (see Exceptions to time lived with you below),
5. Is claimed as a dependent on your return, and
6. Was a U.S. citizen, a U.S. national, or a U.S. resident alien. For more information see Publication 519, U.S. Tax Guide for Aliens. If the child was adopted, see Adopted child below.

Many Happy Returns is open for business!

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Debra S. Lawrence is 1992 graduate of the University of Michigan-Flint who has a degree in accounting and has worked in the financial industry for almost 25 years.

Visit her to make sure you Don't Get Burned On Your Return when dealing with  Uncle Sam.

Appointments are available by calling 810-867-4394 or by emailing deb.mhr@comcast.net.

New clients receive a $20 discount on their 2010 return.