There have been some recent changes in the tax laws — and, yes, they're going to be on the test. The answers, and your overall grade, are at the end.1. We'll start with an easy one. In 2019 the standard mileage rate for using your car for business purposes increased by 3.5 cents. What's the new deduction (per mile)?
- 58 cents
- 51 cents
- "Your mileage may vary"
- If it's less than a dollar, I just throw it in a jar
- Like tipping, the amount is up to you
3. And, of course, "QBI" stands for …?
- Qualified Business Income (hint: it's this one)
- Quantifiable Back Inventory
- QuickBooks Investment
- Quotient of Bad Intelligence
- Wage income
- Interest income not properly allocable to a trade or business
- The 28 bucks you won in the weekly football pool
- All of the above (i.e. all of the above do not constitute QBI)
- I don't think I'm allowed to say that in a professional setting
- To paraphrase Shakespeare, a limitation on the deduction for business interest expense by any other name would be just as sour
- If I don't know what it's called, can I just ignore it?
- The section 163(j) limitation
6. Determining your 163(j) limitation involves calculating your ATI. What does "ATI" stand for?
- Again with The Initials?
- Another Thing Ineligible
- Adjusted Taxable Income
- At Times Incoherent
- The penalty I pay for losing interest when my spouse talks about floor plans
- A lot less than you'd think
- I'm sorry, were you talking to me?
- “Floor plan financing interest expense is interest paid or accrued on floor plan financing indebtedness. Floor plan financing indebtedness is indebtedness that is used to finance the acquisition of motor vehicles held for sale or lease, and that is secured by the acquired inventory. For example, if you own an automobile dealership and paid interest on a loan that is secured by the dealership's office equipment, then such interest is not a floor plan financing interest expense.”*
* That's the verbatim explanation from the Internal Revenue Service. All the more reason you should use an outsourced bookkeeping services provider rather than try to navigate all these tricky IRS codes yourself.
7: OK, so how many would you have known if it wasn't multiple choice?
5-6: Bet you never expected to know this much about tax law when you started your business
2-4: As they used to say in school: "Needs to work harder"
0-1: We pity your poor CPA