Forty Cent Difference Between 2016 Business and Charity Mileage Deductions

The IRS actually lowered the amount per mile that a business owner can deduct for vehicle use in 2016. (See 2016 Standard Mileage Rates for Business, Medical and Moving Announced.) The standard mileage deduction went from 57.5 cents for 2015 to 54 cents.

The amount that a volunteer using a car for charity can deduct in 2016 stayed right where it’s been for years, at 14 cents per mile. So relatively speaking, the volunteers are a little better off than they were last year. After driving hither and yon to set up a charity auction, visit shelter dogs and cats (and birds, and reptiles . . . ), clean up a shoreline, and so on, they’re only an even 40 cents worse off per mile than had they been driving the car for business purposes.

Does the IRS hate charitable work? No, the difference is based on a technicality. The charitable mileage deduction is set by federal statute, which would take an act of Congress to change. Congress never seems to get around to that particular fix.

The standard mileage rate for business, by contrast, is within the IRS’s power to change. The agency announces a new rate annually, based on the latest fixed and variable costs of operating an automobile.

If you’re volunteering for charity and using your car to get you to the facility and back, or for other purposes related to your volunteer work, and you want the maximum deduction, you might want to do it the more laborious way: keep track of your miles, and figure out the per-mile cost of gas and oil, as directly related, variable expenses. (General wear and tear can’t be included for the charitable mileage deduction.) See IRS Publication 526, Charitable Contributions, for details (under “Out-of-Pocket Expenses in Giving Services”).

And if you’re a leader or manager of a charitable or nonprofit organization, be sure to remind your volunteers about the tax deductions they can take for expenses they incur. Not only mileage, but other expenses they pay for out of pocket (aprons, treats for kids, pets, or other clients, art supplies, and so forth) can be deducted.

Minimum Wage Increases in the New Year

Witgavel over money istockh the start of the new year, the minimum wage has increased in several states. The federal minimum wage remains at $7.25; this is the lowest hourly amount that employers can pay employees in the United States. However, if a state has a higher minimum wage, the employer must pay the higher amount. Likewise, if a city or county has a higher minimum wage than the federal or state rate, the employer must pay the higher amount.

As of January 1, 2016, the minimum wage increased to the following amounts:

  • Alaska: $9.75
  • Arkansas: $8
  • California: $10
  • Colorado: $8.31
  • Connecticut: $9.60
  • Hawaii: $8.50
  • Massachusetts: $10
  • Michigan: $8.50
  • Nebraska: $9
  • New York: $9
  • Rhode Island: $9.60
  • South Dakota: $8.55
  • Vermont: $9.60
  • West Virginia: $8.75

Employers and employees should check with their city or county to find out if there is a local minimum wage. For more information about the rules in your state, see Your Right to Minimum Wage.

Californians More Obsessed Than Anyone About Housing Bubble in 2015

sf aerialThe folks at Estately decided to honor the closing of 2015 by running a bunch of search terms through Google and figuring out which states’ residents led the U.S. pack in searching for the same terms. Though the choice of terms may say more about Estately than about the U.S. populace at large (“Dad bod?” Really?) a couple of searches stood out for anyone interested in real estate matters.

First off, residents of California searched for the term “housing bubble” more than residents of any other state. And no wonder: They’re probably hoping or fearing that the crazy rise in home prices in the last year or two will soon end, or better yet turn in the other direction. (Whether they hope or fear depends largely on whether they’re planning to buy or sell a home.)

California prices went up by 6% or 7% in some areas, according to the California Department of Realtors (CAR). The median home value in California is currently $450,600, according to Zillow.

But people hoping for a bursting bubble may be disappointed, if CAR projections are correct. CAR is forecasting more modest price gains (due to factors like the Fed raising interest rates), but still expects home prices to increase in the 3% to 4% range.

Californians do have other things on their Googling mind, fortunately or not. Like the iPhone6, Mark Zuckerberg, and Kim Kardashian.

Meanwhile, in Florida, they’re Googling “home prices” at a higher rate than in any other state. But hey, with a median home price of $180,700, what are they worried about? (Actually, they’re worried about Trump’s net worth, Obamacare, and concealed weapons permits, according to Estately’s research).

Your Home Is Your Fortress: But Can Emergency Responders Get In?

ambulanceHolidays are for visiting family, which in my case means visiting a place with a lot of AARP publications sitting around. And one of the aforementioned (December 2015 AARP Bulletin) offers useful reminders on the effects of living behind carefully locked doors and barred windows, perhaps with a zealous security guard or a protective dog, if you need to be rescued by ambulance or fire personnel.

Bottom line: Your rescuers may not be able to reach you.

The article, ominously titled “When Every Second Counts,” cites “real-life tragedies,” in which emergency responders couldn’t break down doors or get past a dog’s sharp fangs in time to save the person inside.

It would all feel a bit sensational if it weren’t real. And fortunately, the article provides some simple, practical advice to tuck into one’s brain for an emergency moment, particularly if home alone: Turn on the lights and open the door after calling 911! If you live in a building with a security desk, call it, too. Better yet, if possible, step outside so that the EMTs can find you quickly; or send someone to wave them down.

In the meantime, AARP recommends thinking ahead about practical measures you can take to ensure that you can be located and reached quickly. For example, cutting back trees near one’s driveway, keeping stairs in good repair, and making sure your house numbers are freshly painted on the curb in reflective paint will all help avoid situations where an ambulance is circling the block or can’t get into the driveway.

Now, what about that dog? Unfortunately, you can’t explain to an animal who are the good guys and who are the bad. The article suggests locking pets away. I would underline that with a caution that, legally speaking, if you aren’t in a condition to restrain the dog and the dog looks ready to attack the first responders, they are schooled in the idea that it’s okay to kill an animal for defensive purposes. (See When Killing a Dog Is Legally Justified.)

Okay, with all that in mind, go ahead and climb that stepladder to put the star on top of the tree . . .

With Winter Storms Felling Trees, Do You Know What Your Homeowners’ Insurance Covers?

treefallStrong winds, heavy rain, and flooding are in the news in various parts of the U.S. this winter, and are all major forces in felling trees. Just this week, the National Weather Service issued high wind advisories for Wyoming, Washington, Oregon, and Montana, and also warned that, “The gusty winds could blow down weaker trees and branches.”

If you’re hearing the wind whip up outside your house, and there are any large trees nearby, now might be a good time to review the terms of your homeowners’ insurance policy.

If your policy is like most, it will cover repair costs associated with having wind blow one of your trees onto your house, garage, fence, or other structures. The same goes if the damage was caused by snow, hail, or sleet. The extent of coverage depends on your policy limits; and remember that you’ll have to pay your deductible first.

Your policy is less likely to cover damage to your landscaping.

Watch out, however: If the insurance company finds that you were negligent in caring for the tree–for example, failed to remove a large dead branch–it can deny you coverage, based on the concept that you yourself were a major cause of the damage.

Who owns the tree is not a key issue. Even it it’s your neighbor’s tree, your policy should cover the damage–again, assuming that your neighbors were not negligent in their tree care. If they were, your insurance company may help you go after theirs for coverage; or you may have to pursue a separate legal claim against the neighbors.

Also realize that homeowners’ insurance policies commonly do NOT cover the costs of removing a tree that simply falls over in your yard, large and unwieldy though it might be. Removal costs can quickly run into the thousands of dollars. Angie’s List offers some helpful advice on this, and warns against attempting tree removal on your own!

What if a tree falls on your car? Look to your auto insurance policy, assuming you didn’t waive “comprehensive coverage.” (If you took out a car loan, you probably lucked out on this issue–your lender likely insisted on comprehensive coverage.)

How about if the tree falls into the street? Your city may be willing to take care of removal, but you’ll need to look into this further.

For more information, see the homeowners’ insurance and neighbors sections of Nolo’s website.