Frequently Asked Questions

1. How long do I have to keep records?
2. What is the standard mileage rate?
3. Do I have to pay tax on the money I inherited?
4. My neighbor says you can deduct up to $14,000 in gifted funds to your children each year. It this true?
5. Since I don't have the money to pay the tax I owe, may I just file an extension?




1. How long do I have to keep records?

Cancelled checks

7 years

Bank deposit slips

7 years

Bank statements

7 years

Tax returns

Permanent

Employment tax returns

7 years

Expense reports

7 years

Entertainment records

7 years

Financial statements

Permanent

Contracts

Permanent

Minutes of meetings

Life of company plus 7 years

Corporate stock records

Permanent

Employee records

Period of employment plus 7 years

Depreciation schedules

Life of company plus 7 years

Real estate records

Permanent

Journal & general ledger

Life of business plus 7 years

Inventory records

7 years

Home improvement records

Ownership period plus 7 years

Investment records

Ownership period plus 7 years



2. What is the standard mileage rate?

Answer: For 2014, the standard mileage rate for cars used in business is 56 cents per mile; for moving expense and medical miles it is 23.5 cents per mile; and for charitable miles it is 14 cents per mile.




3. Do I have to pay tax on the money I inherited?

Answer: Most often you do not have to pay tax on money you inherit. It does, however, depend on where the money comes from. If you have inherited an IRA or an annuity, you will be subject to tax as you receive it. Sometimes, from the date of death until the distributions are made to the heirs, income is earned on the estate assets. This would be taxable to you. But as a general rule, no, the money you inherit is not taxable.



4. My neighbor says you can deduct up to $14,000 in gifted funds to your children each year. It this true?

Answer: Unfortunately, no, this is not true. You can make a nontaxable gift of $14,000 (per 2014-2015 limits) to anyone you choose, not just your children, each year, but nontaxable is different than deductible. Nontaxable means your children do not have to declare the $14,000 as income and pay tax and you do not have to pay a gift tax on it. There is no charitable deduction for you as the donor of such a gift.



5. Since I don't have the money to pay the tax I owe, may I just file an extension?

Answer: An extension gives you additional time to file your tax return only. It does not give you additional time to pay your tax. You will be subject to interest and possibly penalty charges if you do not pay your tax by the original filing date.



Location & Contact Info

Located Near Washington Square:

Plaza West Building
9600 SW Oak St., Suite 330
Portland, OR 97223

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Contact Us

503.244.8844 [ Phone ]
503.244.5898 [ Fax ]
brian@pandgcpa.com

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