NEWS FROM BPS

New Employee

R. Benjamin (Ben) Glenn, CPA, joined Bauknight, Pietras & Stormer in October as a senior tax consultant. Ben has over six years experience in public accounting and tax compliance services and will provide tax compliance and planning services for individuals, corporations and partnerships. He has extensive experience with rental real estate and construction tax entities. He attended the University of South Carolina and received his Bachelor of Arts and Sciences from Louisiana State University.

Ben and his wife Kara serve as junior high youth advisors at Eastminster Presbyterian Church and are the proud owners of a boxer (Dru) and a black lab (Ace).

In Her Own Words

This is not NBC news, but we thought we would share with you a report from Margaret Miller, our office manager about her recent volunteer activities. Margaret Miller shares the following:

"I have been a Disaster Services volunteer with the American Red Cross since 1991 and have received training in various areas such as Damage Assessment, Shelter Operations, Mass Care and Records & Reporting. I have also been certified in CPR and First Aid, though my certificates are presently out of date. Over the years, I have assisted on several occasions at the Columbia headquarters by answering phones and doing data entry to free up regular employees to do their respective jobs.

In response to Katrina’s tragedy, the Columbia Chapter literally received thousands of offers from people volunteering to help and hundreds of thousands of phone calls on every topic imaginable. Since Katrina, I have volunteered approximately 60 hours (14.5 due to the generosity of BPS) primarily performing data entry of information into the national “trained volunteer” data base so that they can be deployed to hurricane affected areas. I have also served as a liaison to direct volunteers and evacuees to specific areas of assistance and to answer general questions posed by the public both on the telephone and in person. I participated in the morning shift of a day-long fund raiser at WIS-TV that raised over $350,000. I was also afforded the opportunity to perform direct intake on evacuees being flown in from Louisiana. It has been a truly humbling and rewarding experience and I am still considering a two-three week deployment to one of the hurricane affected areas."

Soccer Report

The Sears Sharks (coached by Chris Stormer) were 8-0 this year—undefeated, unscored upon, and unstoppable. They scored 51 goals for an average margin of victory of greater than 6-0 per game. According to Chris (who played soccer for Clemson, when they used a large round rock instead of a ball), it had absolutely nothing to do with coaching, they simply had a lot of very athletic 2nd grade girls.

Jay Swearingen coaches two soccer teams. His 4-5 year-old team (with John Scott Swearingen) is currently 5-1 and looking good. His 6-7 year-old team (with Jesse Swearingen) is 5-0-1 and is also looking very good.

The firm is sponsoring a team of 17 year-olds playing in the adult indoor league at The Plex (NE Columbia). This team (including Michael Pietras) is currently undefeated and in first place. Games are Sunday evenings from 7-10pm. If you have never watched an indoor game, you are missing a very fast-paced, exciting brand of soccer.

In-House Seminars

We had a very good turnout for our October 28 seminar. Approximately 30 people heard a variety of accounting and tax topics.

We will keep you posted on the timing for future seminars.

More Seminar News

Beth Bauknight and Cherie Kallio will be teaching “South Carolina/Federal Fiduciary Income Tax Workshop” in North Charleston on November 3, 2005 and in Columbia on November 4, 2005. The seminar is sponsored by Professional Education Systems Institute, LLC.

If you are interested in attending, Beth or Cherie can give you the details (803-771-8943).

Pietras Appointed to AICPA Panel

Tom Pietras has been appointed to the AICPA’s Virtual Grassroots Panel (“VGP”) for 2005-2006.

The VGP is an online group of AICPA members. The VGP will provide input and feedback to the AICPA’s leadership, its Strategic Planning Committee, state societies and others regarding current events in the accounting profession, AICPA initiatives, emerging opportunities and threats, and “forward-looking” items for the profession.

• AICPA Website

Client News
Clients in the news

The Arnold Companies

The Arnold Companies is pleased to announce the hiring of Mr. Jeffrey Larimore as Chief Financial Officer. Mr. Larimore has a diversified background with public and private organizations. His duties and responsibilities have varied from multi-venture financial reporting and forecasting, property and asset management, acquisition due diligence and financing, property dispositions, development consulting, real estate taxation and retail operations. Mr. Larimore holds a CPA license and a B.S. in Accounting from the University of Akron.

TECHNICAL ISSUES

Standard mileage rates take historic jump

In an unprecedented move in response to the recent spike in gasoline prices, the IRS announced a mid-year change in its standard business mileage deduction rate - from 40.5 cents per mile to 48.5 cents per mile. Rates for driving in connection with charity work, education or moving have also been raised.

Ordinarily, the standard business mileage rate is set for the entire year at the end of the prior year and stays at that rate through the year. Not in 2005. Because of rising gasoline prices, the IRS announced a special increase to 48.5 cents per mile for vehicle use between September 1, 2005 and December 31, 2005. The rate for travel before September 1, 2005 remains at 40.5 cents per mile.

And for 2006? The IRS said it will wait until later this year to announce the standard mileage rates for 2006. If gas prices continue to rise, the mileage rate will increase even further. If they fall, the IRS warns that the standard mileage rate, too, probably will drop.

Standard mileage rate basics

The standard mileage rates allow taxpayers to deduct vehicle operating expenses without having to prove every detail through receipts. The standard rate applies to the use of automobiles, vans, pickups, and panel trucks and to vehicles that are leased as well as owned. Standard rates are provided for business, medical, moving, and charitable uses of a vehicle during the year.

Taxpayers should be prepared to substantiate their miles: the miles driven, the dates they used the vehicle, the location where the taxpayer worked, and the services performed. Taxpayers claiming the standard mileage rate also can deduct parking fees and tolls, but cannot deduct expenses for gasoline, oil, tires, insurance and repairs, and license and registration fees.

You cannot use the standard mileage rate for one period and the actual expense method for the other. Whatever method is chosen must be used for all of 2005.

Business standard rate

The business standard mileage rate can be used by employees and self-employed individuals. If the standard rate is used, business taxpayers must record a deemed depreciation "deduction" of 17 cents per mile for 2005 for purposes of figuring the vehicle's tax basis. Taxpayers claiming the standard rate must use straight-line depreciation for the vehicle if they later switch to actual vehicle expenses. Use of an accelerated method or bonus depreciation in an earlier year entirely disqualifies the taxpayer from later switching to the standard rate.

Business taxpayers cannot use the standard rate if they use five or more vehicles at the same time.

Medical, Moving and Charitable Expenses

The IRS also raised the rates for computing medical, moving and charitable expenses. For medical and moving expenses, the IRS raised the standard rate to 22 cents per mile for the period September 1, 2005 to December 31, 2005. The rate is 15 cents per mile for the first eight months of 2005.

Taxpayers using a personal vehicle for charity work ordinarily can claim a tax deduction of 14 cents per mile, instead of actual expenses. This rate is set by the Tax Code. In the Hurricane Katrina Tax Relief Act, Congress increased the rate for Katrina relief workers to 70 percent of the standard business rate -- 34 cents per mile -- for the period September 1, 2005 to December 31, 2005. If a Katrina relief volunteer is reimbursed for the cost of using his or her automobile, the reimbursement is excluded from income, up to the full standard business rate.

Come in for service?

If you're confused about how the change in the standard mileage rates affects your particular tax situation, please call for an appointment. While we can't promise you a free oil change, we can help tune up your tax records and overall strategy to get the most tax deductions per mile for your vehicle use.

The standard rates apply to local travel and travel away from home. The increased rates for business, medical and moving expenses are available to all taxpayers, not just taxpayers affected by Hurricane Katrina.

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