Ask Jason, 3/16/12

Q: Can I deduct mileage to a PO box?

A: It depends. If you are a home-based business and a portion of your home is used regularly and EXCLUSIVELY for business, then you can deduct any business mileage driven from your home, including to your PO box. If your home is not used regularly and exclusively for business, then mileage from your home to your first business stop is NOT deductible but mileage driven from business stop to business stop is deductible. This article discusses this issue further.

Q: What things does a Schedule C business need to issue 1099s for in 2012?

A: Basically any payments to unincorporated independent contractors if those payments total more than $600 for the year. Congress mercifully repealed the stricter 1099 requirements that would have required businesses to issue 1099s to any entity that they paid more than $600 to.

Q: Can I take Section 179 on equipment purchases for a rental?

A: No, owners of rental property cannot take Section 179 deductions. But rental owners ARE eligible for bonus depreciation if the assets purchased are brand-new.

Q: How often does irs catch married people claiming head of household?

A: Um … I don’t know how often the IRS “catches” it, but if you don’t qualify for head of household filing status you can’t file as head of household! That is called “tax fraud.”

Q: When do you subtract an Iowa excess 179 deduction?

A: Do you mean disallowed Section 179 deductions prior to 2010 when Iowa came to its senses and coupled fully with federal 179 limits? If so, you use Iowa Form 4562A.

Q: When do you use Section 179 vs. bonus depreciation?

A: It depends on several factors, including if the assets are new or used. This blog post has more info.