Ask Jason, 4/13/12

Happy Friday the 13th! Here are some questions that have come in recently.

Q: Can a noncustodial parent take mileage writeoffs?

A: This is hard to answer without more information. If you are asking about mileage driven to pick up your kids, the answer would be no.

Q: At what age do you stop filing taxes?

A: There is no magical age where taxes go away. However, the income thresholds for being required to file a return get friendlier as you get older. See IRS Publication 17 for more information.

Q: Must an asset be brand new to qualify for bonus depreciation?

A: Yes.

Q: What would be the gift tax on a 2012 Cadillac worth $40,000?

A: Assuming you are the “giver” of the gift, the taxable gift amount would $27,000 (there is a $13,000 exclusion amount). My quick look at the gift tax rates came up with $3,200 of gift tax assessed on a $27,000 gift, but most people would end up using part of their lifetime credit and not actually owe tax.

Q: How much is the Iowa Earned Income Credit per child?

A: The Iowa EIC is not based on a per-child basis. It’s a straight 7% of whatever your federal EIC is.

Q: Can a nonlicensed daycare deduct expenses?

A: Yes, except possibly the deduction for business use of the home. For unlicensed daycares, that deduction is only available if you are not required to be licensed.

Q: I am a new Enrolled Agent. How much should I charge for taxes?

A: It depends on the going rate for tax services in your area. You want to make sure you’re in the middle. Don’t be the cheapest game in town.

Q: Who do you use for your secure website?

A: I use a provider called “CPA Secure”,, and it works great.