depreciation en-US 7 Reasons to Love That Used Car Smell <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/7-reasons-to-love-that-used-car-smell" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="" alt="car" title="car" class="imagecache imagecache-250w" width="250" height="167" /></a> </div> </div> </div> <p>If you love that new car smell and aren't willing to settle for a &quot;new car smell&quot; scented air freshener, you'll need to be prepared to pay a hefty premium for your new car. If, however, you're willing to allow another owner to drive the first 15,000 miles or more, then you'll be able to save thousands of dollars. (See also: <a href="" target="_blank">Save on Car Maintenance With These 5 DIY Tips</a>)</p> <p>As an extra benefit, you'll probably also find that there are a couple of non-financial benefits to buying a used car, too.</p> <h2>1. Less Depreciation</h2> <p>Until they are considered an antique, every vehicle depreciates as time passes. However, the depreciation is more intense the newer the car. <a href="" target="_blank"> reports</a> that a new car will typically depreciate 11% the minute you take it off the lot. Furthermore, after the first year your &quot;new&quot; car is typically worth 19% less than you paid for it.</p> <p>That's a lot to pay to be the first person to have the honor of spilling coffee all over the center console.</p> <h2>2. Lower Purchase Price</h2> <p>Do you like driving newer cars with fewer miles? Why not focus on <a href="" target="_blank">buying cars</a> that are about a year old and have 15,000 miles? There's still a lot of good car left, and you can save yourself 20% compared to buying the car new.</p> <p>Typically, if you're looking for newer used cars, you can find great deals because people who are selling cars after a year are usually just coming to the realization that they cannot afford the vehicle any longer. Their motivation to sell and your desire <a href="" target="_blank">to get a great deal on a used car</a> is a perfect combination.</p> <h2>3. Lower Insurance Costs</h2> <p>There is a direct correlation between the value of your vehicle and the amount of insurance you'll pay. Thus, if you buy a car that is at least a year or two old, you'll pay <a href="" target="_blank">lower insurance premiums</a>.</p> <h2>4. Reduced Taxes and Registration Fees</h2> <p>Depending on your state, you may not be required to pay sales tax on a used vehicle. New Hampshire, Delaware, Oregon, and Montana don't charge sales tax for a new car. In Georgia, you'll pay sales tax if you buy a car from a dealership, but not if it is a private sale.</p> <p>Every state has different registration fees, and those fees can vary based on the age of a vehicle. For example, in Montana if a car is 0-4 years old, you'll pay $217 to register the car. However, if the car is older than 11 years old, you'll pay $28.</p> <h2>5. More Money for Real Investments</h2> <p>Opportunity cost dictates that the more you spend on a vehicle, the less you'll have for something else. If you have $4,000 tied up in a vehicle, then you <em>don't</em> have $4,000 to use towards retirement, college savings, or any other worthy savings goal that has the potential to increase in value.</p> <h2>6. Door Dings Are Not Your Problem</h2> <p>Some people who have new cars insist on parking a long way from the entrance to the store. Why? They are afraid that their new, shiny, glossy car might get a nick or a ding. But you're not worried. Not in the least.</p> <h2>7. And Neither Is Spilled Juice</h2> <p class="MsoNormal">A colleague may spill coffee on the upholstery. A kid might write on the door panel. A stone may ding your windshield. Your dog will leave dog hair all over the back seat.</p> <p>When you buy a car that already has a little personality, your spills, marks, and stains will just become another chapter in the story of that vehicle. Sure, it will be frustrating when something happens, but being the first to witness the desecration of a perfect car is <em>even more frustrating</em>.</p> <p><em>Do you usually purchase new or used vehicles? Can you think of any additional benefits of buying a reliable used car?</em></p> <a href="" class="sharethis-link" title="7 Reasons to Love That Used Car Smell" rel="nofollow">ShareThis</a><br /><div id="custom_wisebread_footer"><div id="rss_tagline">Written by <a href="">Craig Ford</a> and published on <a href="">Wise Bread</a>. Read more <a href=""> articles from Wise Bread</a>.</div></div> Cars and Transportation buying a car depreciation used car Tue, 23 Apr 2013 09:37:28 +0000 Craig Ford 973517 at State and Local Tax Surprises for Your Small Business <div class="field field-type-link field-field-url"> <div class="field-label">Link:&nbsp;</div> <div class="field-items"> <div class="field-item odd"> <a href="" target="_blank"></a> </div> </div> </div> <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/small-business/state-and-local-tax-surprises-for-your-small-business" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="" alt="California Capitol Building" title="California Capitol Building" class="imagecache imagecache-250w" width="250" height="166" /></a> </div> </div> </div> <a href="" class="sharethis-link" title="State and Local Tax Surprises for Your Small Business" rel="nofollow">ShareThis</a><p>Griping by business owners about federal income taxes on their hard-earned profits is common, and often appropriate. However, there may be even greater reasons for complaining about state and/or local taxes. Where your business is located can make a big difference in the amount of state and local taxes you pay.</p> <p><strong>Depreciation Rules</strong></p> <p>Usually, the cost of business equipment and machinery is depreciated over a number of years. However, for federal income taxes, there are two important tax breaks that apply for 2011 to accelerate write offs for the year in which the equipment is bought:</p> <ul> <li>A &ldquo;Section 179 deduction&rdquo; of up to $500,000: This deduction, also called &ldquo;first-year expensing,&rdquo; applies to both new and pre-owned items, such as computers, office furniture, and other equipment. It can only benefit profitable businesses.</li> <li>100% bonus depreciation: The full cost of new items can be deducted in the year of purchase instead of spreading depreciation write-offs over a number of years. There is no dollar limit to this deduction. The deduction can be used to create or increase a net operating loss for businesses that are marginal or in the red.</li> </ul> <p>These tax breaks do not necessarily apply on the state level. In seven states &mdash; Alaska, Florida, Nevada, South Dakota, Texas, Washington, and Wyoming &mdash; there is no reason for concern because they have no income tax. New Hampshire and Tennessee tax only interest and dividends. Of the other states, some follow federal rules while others have &ldquo;decoupled&rdquo; their tax rules from federal law and apply their own rules when it comes to depreciation.</p> <p>Not every state follows the federal rule allowing first-year expensing. Hawaii, Pennsylvania, and Wisconsin, for example, do not. California limits expensing to $25,000 (compared with the $500,000 federal limit).</p> <p>New York does not allow bonus depreciation except for resurgence zone property and New York liberty zone property, which are specially-designated areas within the state. New York is not alone. Many other states (called &ldquo;nonconforming states&rdquo;), including California, Massachusetts, and New Jersey, do <em>not </em>allow bonus depreciation.</p> <p>Other states have certain refinements for bonus depreciation. For example, in Connecticut, sole proprietors can use bonus depreciation but corporations cannot.</p> <p><strong>Capital Gains</strong></p> <p>For federal income taxes, capital gains are usually taxed at 15% (those in the 10% or 15% tax bracket pay no federal income tax on their gains). This rule is set to apply through 2012.</p> <p>What&rsquo;s more, those who acquire &ldquo;qualified small business stock&rdquo; after September 27, 2010, and before January 1, 2011, and hold it more than five years, will pay no federal income tax on their gain, regardless of their tax bracket at the time of sale. Qualified small business stock is stock in a C corporation engaged in technology, manufacturing, or certain other endeavors.</p> <p>On the state level, however, these favorable capital gains rules do not necessarily apply. In California, for example, capital gains are taxed as if they were ordinary income. There is no preferential treatment given to capital gains; 22 other states apply the same treatment. However, there are some variations. In Minnesota, capital gains from most investments are taxed as ordinary income, but the state uses the favorable federal rule for gain on qualified small business stock.</p> <p><strong>Special Taxes</strong></p> <p>Some jurisdictions have special or unique taxes that do not apply at the federal level. For example, in the New York City metropolitan area, there is a Metropolitan Commuter Transportation Mobility Tax, referred to as the <a target="_blank" href="">MTA tax</a>, imposed on self-employed individuals and company payrolls. The tax rate is 0.34% of an individual&rsquo;s net earnings from self-employment allocated to the Metropolitan Commuter Transportation District (the five counties in New York City and seven surrounding counties).</p> <p><strong>Bottom Line</strong></p> <p>While there is a level playing field under federal tax rules for businesses across the country, state and local tax rules can significantly alter your after-tax profits depending on where you are located. Learn more about your state taxes and how they stack up against other states from the <a target="_blank" href="">Tax Foundation</a>.</p> <p>As always, the best course is to work closely with a tax professional who is knowledgeable about tax rules in your location. This will enable you to comply with tax filing and payment rules and avoid penalties and interest.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">Written by <a href="">Barbara Weltman</a> and published on <a href="">Wise Bread</a>. Read more <a href=""> articles from Wise Bread</a>.</div></div> Small Business Resource Center depreciation local taxes small business small business taxes state taxes Wed, 20 Apr 2011 22:14:15 +0000 Barbara Weltman 524256 at