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W. Marc Gilfillan

W. Marc Gilfillan, CPA, NC, individual and business CPA and Tax expert, shares about the history of taxes…

The isle of Rhodes: a seminal connection to Rome and Greece. Any shipping from the east halted for supplies or to transfer cargo at Rhodes. The port at the city, similar to all other harbors, had a tax on all transaction - 2%. Rhodes was prosperous and flourished, in the banking and commerce industry specifically. The elite of the island erected a hundred-foot-tall bronze colossus of Apollo at the entrance to the port. It became known to us as one of the 7 wonders of the ancient world (whether it truly straddled the harbor entrance remains a mystery). If you’re feeling the pressure with today’s taxes, call a Cary NC CPA for all your tax-related needs!

Things were fine until 225 BC. An earthquake toppled the colossus and not much more is known of Rhodes following the earthquake. Did the earthquake wipe them out? Destroy the harbor? Well, here’s the remainder of the story. The Roman Senate was furious with Rhodes because during the late Rome-Macedonia War, Rhodes had maintained neutrality. After taking so much from Rome for so many years, Rome expected more. They wanted Rhodes to take their side and contribute to the war effort. Because of this, after the war, the Romans chose their course of action. They established a tax-free port on the nearby Isle of Delos. There wasn’t a two percent harbor tax! In the first year since the port was established, trade declined 85% in Rhodes. Rhodes was ruined. Go here if you want help with modern-day Tax Preparation, bookkeeping, and payroll in Durham NC.

So, was it the earthquake that ruined Rhodes’ prosperity? The answer is no, Rhodes had since rebuilt after the disaster (however, they did not rebuild the statue). What brought Rhodes down was not an earthquake or natural disaster or war or disease. It was Roman taxes. Everything to dodge a two percent tax. The Switzerland of the ancient world, the commerce giant of the east was toppled because traders wanted to avoid a 2% tax.

Keep an eye out for W. Marc Gilfillan’s next chapter in his History of Taxes series: Roman Taxes.

http://www.marccpa.com/

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The IRS mileage rate as of January 2009 can be used to determine how much you should be allowed to claim as a deductible expense for operating a car or vehicle for business use, for medical use or for moving purposes.

Effectively this means that the IRS mileage rate for driving a vehicle for business purposes is now calculated at 55 cents per mile driven.

However this figure dros to twenty-four cents/mile driven for any moving purposes. It’s okay for you to claim deduction of fourteen cents per mile driven from any charitable organizations.

With the cost of fuel slowly creeping up again, making the most of claiming for deductible expenses for vehicle use means the IRS mileage rate could prove very convenient for many people.

When you’re calculating your own deductible expenses and you’re factoring in the IRS mileage rate throughout the tax year, you should keep in mind that there are two ways to calculate deductible vehicle costs.

The first is the IRS mileage rate where by far the simplest way. The sum of 55 cents per mile driven for business purpose was determined by basing estimates of the rate of running a car.

For the vast majority of people using the IRS mileage rate can help to reduce your tax liability and increase the amount you’re potentially likely to claim in deductions.

Somehow another option for many business people is to evaluate the actual expenses to operate a car the whole year. It means keeping an exact log book to note the whole miles driven. It also means keeping your receips for fuel and servicing. Registration and insurance costs should also be included, along with any other routine maintenance or repairs that may arise through the year.

Noting lots of costs throughout the year can be difficult on the paperwork side of things and then lots of people like to use the calculation for the IRS mileage rate. You may find that your deductions outweight the amount handed automatically by the IRS mileage rate if you are willing to put up a little discomfort of keeping receipts that real costs.

The best way to determine whether you should use the IRS mileage rate or the actual cost basis is to either speak to your accountant or try to keep a running cost of your total expenses for a full three months and then multiply that figure by 4 to give you an estimate of how much you’ll be able to claim in an entire year. If you’re unsure of which way to proceed, call the IRS and they’ll be able to assist you with any questions.

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