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New looks on 1040 schedules

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in Small Business Tax,Small Business Tax Deduction Strategies

Here are some of the major changes on 1040 schedules for 2014.

Schedule A, Itemized Deductions

Line 1, Medical and dental expenses. The standard mileage rate for medical travel in a vehicle in 2014 is 23.5 cents per mile.

Line 21, Unreimbursed employee expenses. The standard mileage rate for business travel in a vehicle in 2014 is 56 cents per mile.

Line 29, Limit on itemized deductions. Itemized deductions for single filers with an AGI above $254,200 and $305,050 for joint filers are reduced.

Schedule B, Interest and Ordinary Dividends

Line 1, Interest. Accrued interest on Series EE U.S. Savings Bonds issued in 1984 and matured in 2014 is taxable on your 2014 return.

Line 3, Excludable interest on Series EE or Series I U.S. Savings Bonds. The exclusion for education-related savings bond interest starts phasing out in 2014 at MAGI above $76,000 for single filers; $113,950 for joint filers.

Schedule C, Profit or Loss From Business

Part II Expenses. Line 9, Car and truck expenses. The standard mileage rate for business travel in 2014 is 56 cents per mile.

Part II. Line 30, Expenses for business use of home. You may use a simplified method to deduct home office expenses based on $5 per square foot up to a maximum deduction of $1,500.

Schedule D, Capital Gains and Losses

Form 1099-B. Form 1099-B, Proceeds From Broker and Barter Exchange Transactions, includes modifications with boxes making it easier to match up with Form 8949, Sales and Other Dispositions of Capital Assets.

Schedule E, Supplemental Income and Loss

Standard mileage rate. The standard mileage rate for driving in connection with rental activities is 56 cents per mile.

 


 

Count on 3 big tax breaks on Form 4562

The Tax Increase Prevention Act of 2014 (TIPA) preserved the three major tax breaks for 2014 claimed on Form 4562, Depreciation and Amortization.

1. A business can claim a maximum Section 179 deduction of $500,000 with a phaseout threshold of $2 million. Claim the deduction on Form 4562, Part I, Election to Expense Certain Property Under Section 179.

2. A real estate owner can write off up to $250,000 of qualified real property expenditures, including expenditures for qualified leasehold improvement property, qualified restaurant property and qualified retail improvement property.

3. A business can deduct 50% bonus depreciation for qualified new (not used) property placed in service in 2014. The deduction is claimed on Form 4562, Part II, Special Depreciation Allowance and Other Depreciation.

Tip: These tax breaks have not yet been extended beyond 2014.

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