Small-business owners take note: Changes in the tax code this year could add a few dollars to your coffers. But you could be in for colossal headaches if you've been sloppy in your record keeping. AMT exemption increase: For tax year 2007, the alternative minimum tax exemption reached $66,250 for a married couple filing a joint return, up from $62,550 in 2006. The exemption rises to $33,125 for a married person filing separately, up from $31,275, and rises to $44,350 for singles and heads of households, up from $42,500. Some small-business experts say the AMT can be a hassle for small firms because many small-business people are taxed on their personal income as self-employed workers. If an entrepreneur's income requires use of the AMT calculation, some business deductions aren't allowed. Standard mileage rate: The rate for business use of a car, van, pickup or panel truck rose 4 cents, to 48.5 cents per mile. Darrel Shinn, president of SSB Tax Professionals in Arlington and Culpeper, said business miles can be deducted, but don't confuse them with miles driven for charity and medical purposes. The Internal Revenue Service treats those miles differently. Shinn said record keeping is essential. "If you keep the records, you get the deduction," he said.
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Courtesy of NASE.org https://www.nase.org/about-us/media-relations/nase-in-the-news/2008/03/10/How_07_Changes_Affect_Small_Business_The_Washington_Post