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Will you be cruising the waters on your boat or camping out in your RV this year? Besides the pleasure you can enjoy through your personal property, you may also be eligible for tax breaks, if certain requirements are met.
Every business needs customers to survive. Owners typically spend a lot of time and energy trying to attract customers to their businesses and then keep them. They rarely asking whether those customers are actually desirable ones. But if you want your company to truly thrive, you may need to evaluate whether your customers are raising your business — or dragging it down. It may make financial sense to drop those that fall into the latter group.
Christine E. Cox, CPA joined Echelbarger, Himebaugh, Tamm & Co., P.C. (EHTC) as a Staff Accountant in the Assurance Department in September 2016 and was promoted to Senior Accountant in 2019. Prior to EHTC, Christine completed a tax internship in Traverse City, MI, where she worked on the preparation of 1099 forms and individual income tax returns. She also has over ten years of experience in finance and accounting, having worked for community financial institutions as a personal banker, and a waste hauling/environmental services company, acting as an Accounting Clerk and Assistant to the Financial Administrator. Christine graduated from Ferris State University with a Bachelor's of Public Accountancy and is a member of the Michigan Association of Certified Public Accountants (MICPA). She obtained her Certified Public Accountant (CPA) license in 2020.
In normal market conditions, people who've been unemployed due to an economic slump are generally eager to take a job when the economy perks up. But times are far from normal in many places and industries. One of the most pressing concerns employers face today is labor quality and availability, according to findings from The CFO Survey for the first quarter of 2021. (See "CFOs Disclose Top Concerns and Employment Outlook" at right).
The IRS uses "Collection Financial Standards" to help determine a taxpayer's ability to pay a delinquent tax liability. Allowable living expenses include those that meet the test of being necessary to provide for a taxpayer's (and his or her family's) health and welfare, as well as his or her ability to produce income.
The IRS allowable living standards are designed to incorporate necessary items including a category for out-of-pocket health care expenses and an allowance for cell phones.
Higher costs may be allowed by the IRS if a taxpayer can prove that these amounts are inadequate.
Here are four categories showing the basic amounts allowed by the IRS in calculating delinquent tax payment amounts (effective April 26, 2021):
1. Food, Clothing and Miscellaneous Items
National monthly standards have been established for five necessary expenses of food, housekeeping supplies, apparel and services, personal care products and services, and miscellaneous items.
|Monthly Expense||One Person||Two Persons||Three Persons||Four Persons*|
|Food (includes food at home and food away from home)||$400||$724||$838||$955|
|Housekeeping supplies (includes laundry and cleaning supplies, stationery supplies, postage, delivery services, miscellaneous household products, and lawn/ garden supplies)||$41||$76||$69||$79|
|Apparel/ services (includes clothing, footwear, material, patterns and notions for making clothes, alterations and repairs, clothing rental, clothing storage, dry cleaning and sent-out laundry, watches, jewelry and repairs to watches and jewelry)||$92||$150||$191||$259|
|Personal care products/ services (includes products for the hair, oral hygiene products, shaving needs, cosmetics and bath products, electric personal care appliances, and other personal care products)||$42||$76||$72||$89|
* For each additional person, add $341 to the four-person total allowance
2. Health Care
National out-of-pocket health care standards have been established for out-of-pocket expenses including medical services, prescription drugs, medical supplies, eyeglasses, contact lenses, etc. This monthly amount is allowed per person in addition to what is paid for health insurance.
Monthly Out-of-Pocket Health Costs
Under age 65
65 and older
3. Housing and Utilities
The monthly standards for housing and utilities are determined on a local basis. The amounts allowed for a particular area and family size cover a taxpayer's primary residence. They include mortgage or rent, property taxes, interest, insurance, maintenance, repairs, gas, electric, water, heating oil, garbage collection, telephone and cell phone.
As you might expect, the allowances vary widely across the nation. Here are some examples:
Family of 1
Family of 2
Family of 3
Family of 4
Family of 5 or more
|Chicot County, Arkansas||$ 1,004
|Marin County, California||$3,332||$3,914||$4,124||$4,598||$4,672|
|Honolulu County, Hawaii||$2,457||$2,886||$3,041||$3,391||$3,445|
|Cook County, Illinois||$1,882||$2,210||$2,329||$2,597||$2,639|
|Anne Arundel County, Maryland||$2,073||$2,435||$2,566||$2,861||$2,907|
|Carson City, Nevada||$1,490||$1,750||$1,844||$2,056||$2,089|
|Merrimack County, New Hampshire||$1,839||$2,160||$2,276||$2,538||$2,579|
|New York County, New York||$3,073||$3,609||$3,803||$4,240||$4,309|
|Polk County, Oregon||$1,592||$1,870||$1,970||$2,197||$2,232|
|Aiken County, South Carolina||$1,216||$1,428||$1,505||$1,678||$1,705|
|Briscoe County, Texas||$1,053
|Juneau County, Wisconsin||$1,274||$1,497||$1,577||$1,758||$1,787|
Transportation standards for taxpayers with a vehicle consist of two parts:
- Nationwide amounts for monthly loan or lease payments — called ownership costs.
- Additional amounts for monthly operating costs, which include repairs, maintenance, insurance, fuel, registration, inspection, parking and tolls.
There's also a single nationwide public transportation allowance.
|Monthly Transportation Allowances|
|National Public Transportation — Fares $217|
|National Vehicle Ownership Costs||$533 for 1 car||$1,066 for 2 cars|
|Operating Costs by Area||1 Car||2 Cars|
|Northeast Region including ME, NH, VT, MA, RI, CT, PA, NY, NJ,
except the following cities:
|Midwest Region including ND, SD, NE, KS, MO, IL, IN, OH, MI, WI, MN, IA, except the following cities:||$201||$402|
|South Region including TX, OK, AK, LA, MS, TN, KY, WV, VA, MD, DC, DE, NC, SC, GA, FL, AL, except the following cities:||$224||$448|
|West Region including NM, AZ, CO, WY, MT, NV, UT, WA, OR, ID, CA, AK, HI, except the following cities:||$242||$484|