Standard Mileage rates

Business
2011: Jan – Jun 51 cents/mile
2011: Jul – Dec 55.5 cents/mile
2012: 55.5 cents/mile

 

Charity:
2011 & 2012: 14 cents/mile

 

Medical/Moving:
2011: 19 cents/mile 2012:
23 cents/mile

 

 

 

[business taxes]

Business tax overivew

Surprisingly, some businesses pay income taxes, and some businesses don't. That's because some entities, called pass-through entities, pass the income through to the owners to pay tax on. Likewise, some businesses file separate income tax returns, and some don't. It's all a bit confusing. We attempt to explain it in simple terms below:

Sole Proprietorship: Tax paid by individual owner   
File Schedule C return, which is part of the owner’s personal tax return (Form 1040)

Partnership: Tax paid by each partner   
File partnership return (Form 1065)

Regular Corporation (C Corp): Tax paid by the corporation   
File corporate Return (Form 1120)

S Corporation: Tax paid by each shareholder   
File corporate return (Form 1120-S)

Limited Liability Company (LLC): It depends   
For LLCs where there is only one member, the LLC can request to be taxed as a C Corp or an S Corp, or do nothing and be taxed as a sole proprietor. For LLCs with more than one member, the LLC can request to be taxed as a C Corp or an S Corp, or do nothing and be taxed as a partnerhsip.

An important note about pass-through entities:
The tax (on the individual's return) is based on the profit earned that year. It is not uncommon that the profit earned was not distributed to the owner. Sometimes the profit on the tax return is not actually cash sitting in the bank account, but inventory sitting on the shelves. Or maybe the profit was used to pay down debt. There are also other considerations, like distributions in excess of basis or suspended losses that affect the taxes. It's a bit complicated so it's a good idea to have some professional help.