Welcome back to Ned’s Blog Spot, where you can find all your tax tips and tricks. Our tax deadline is quickly approaching, and we want to make sure we provide you with all the information we can, for your filing to be as quick and painless as possible. Below you’ll find a few quick tidbits about the upcoming tax season.
ESTIMATED TAX PAYMENTS: DUE JAN 16!!
Reminder for taxpayers who didn’t pay enough tax during 2023 to make their final fourth quarter estimated tax payments on or before Jan 16, 2024, to avoid possible penalties or a tax bill when filing this year.
If you own a vacation home, it may have crossed your mind to rent it out occasionally. It’s important to know; proceeds from a vacation home that’s been rented out 14 days or less per year will be tax-free, despite the amount charged. To qualify, the home must be your personal residence. The IRS definitely of “personal residence” is broad, and more information on this can be found on the IRS website (https://www.irs.gov/publications/p523#:~:text=If%20you%20own%20and%20live,factors%20are%20relevant%20as%20well.) On the contrary, renting out the home for more than 14 days per year, makes the rent subject to be taxed. Of course, like any other rental your expenses may be deducted. How much you’ll be able to deduct will be determined by dividing the number of days you rented the home by the combined total days of personal and rental use. In the event your rental activity generates a loss, the tax laws prohibit deducting rental losses for a personal residence, but the loss isn’t completely gone. This loss can be carried over and used to offset future rental income. If the vacation home is not a personal residence and you actively participate in the rental activity you’ll be able to deduct $25,000 of rental losses against your other income.
Good news! The standard mileage allowance for business driving is being raised in 2024. The rate will increase by $0.67/mile. If you use the standard mileage rate, you must reduce the basis of the vehicle by the depreciation component, which is, $0.30/mile. Make sure you’re keeping a detailed log of the business miles driven.
The rate for medical travel and military moves is $0.21/mile. You can also claim the cost of parking and tolls but cannot add the cost of fuel or repairs.
If you are able to itemize on the Schedule A, you can deduct $0.14/mile for charitable driving, plus what you pay for parking and tolls. This rate is fixed by law and doesn’t go up or down annually based on pump prices. Additionally, you can take a write-off for other expenses you accrue while doing charity/fundraising, such as the cost of stamps for a mailing, items bought for a bake sale, or auto cleaning supplies for a car wash. However, you will not be able to deduct the value of your time spent doing this work.
TENNESSEE STORM VICTIMS RELIEF
If you are an individual or business affected by the severe storms and tornadoes in Tennessee on December 9, you will have until June 17, 2024, to file taxes and make tax payments. Relief is available to locations that have been designated as disaster areas by the Federal Emergency Management Agency (FEMA); this includes Davidson, Dickson, Montgomery, and Sumner counties.
We hope you find this information helpful as you begin to prepare for the upcoming tax season. If you have any questions, the information for our downtown office will be listed below and don’t forget to check back for more!
Ned Jackson Downtown Office
255 N Liberty Street
Jacksonville, FL 32202