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Client Resources

FAQs

Having worked as certified public accountants for decades, the team at Adele Brady Bolson CPA PS has answered many questions – and happily so, as we’re here to help you! The following questions are those asked most frequently by our clients. If there are questions you’d like us to add to this page, please contact us.

Q. Under what circumstances do you provide my name, contact information, or other private data to others?
A. We believe protecting the confidentiality of our clients’ identity and personal information is of paramount importance.  Our privacy policy explains the details.
Q. 
What is the social security wage base?
A. For 2017 the wage limit for the OASDI tax (old age, survivors, and disability insurance) is $127,200; the 2018 wage limit is increased to $128,400. For 2017 and 2018, this tax is at the rate of 12.4% for self-employed, or 6.2% for employees, and a contribution of 6.2% by the employer for a total of 12.4%. There is no ceiling on the wage base for Medicare tax, which is 2.9% for self-employed and 1.45% for employees (also matched by the employer). A .9% Medicare surtax applies to wages and income from self-employment in excess of $250,000 for married filing joint return ($200,000 for single taxpayer).
Q. 
How much can I deduct for use of my personal vehicle?
A.  You can either use a standard mileage rate to calculate deductions for business mileage, or use your actual costs, including depreciation, fuel, insurance, maintenance, etc., but you cannot use both! The standard mileage rates for 2018 are 54.5 cents per mile for business mileage, 14.0 cents per mile for charity, and 18.0 cents per mile for medical and moving mileage. The standard mileage rates for 2017 are 53.5 cents per mile for business mileage, 14.0 cents per mile for charity, and 17.0 cents per mile for medical and moving mileage.
Q. 
What records do I need to keep to support my deduction for business use of my personal vehicle?
A.  You should keep a written record, maintained at or near the time of the use of the vehicle, that includes the date, destination, business purpose, and mileage for each business use, as well as the total mileage for that vehicle for the year.  A good way to do this is to keep a mileage log in your vehicle.  We will be happy to send to our clients a free mileage log booklet; just ask us! 

Or you can download this mileage log Excel template: Mileage Log

Q. 
How long should I keep my records supporting my tax returns? 
A.  The statute of limitations for IRS audits is generally three years from the filing date; for Washington Department of Revenue audits it is four years.  So if you keep all of your records for four full years after the end of the year in question you should be safe. However, if you are being audited for fraud, the statute is extended to seven years.  You will need purchase records of assets that you may later sell, such as real estate, mutual funds, securities, and collectibles, until four years after you sell the asset, not four years after you bought it.  I do recommend that you keep copies of the actual tax return forever.  The return itself isn't that large, and may be used to support various legal claims that aren't directly related to income taxes.
Q. 
How many exemptions should I claim on my W-4?
A. 
The IRS tables and formulas for employers to use in calculating payroll withholding are imperfect at best. They have only two filing statuses, married and single, though even if married you may choose to use the single tables to get more withheld. When you file, there are four possible filing statuses. The tables can't possibly take into account earnings from other sources, or know your spouse's earnings. The best way to calculate an accurate W-4 is to actually estimate your income taxes for the year and calculate backwards what exemption claim will get that amount withheld, based on your earnings. We will be happy to calculate this for you.