Frequently Asked Questions


General Tax Filing Questions:
What is the standard mileage rate?
How do I value the noncash items that I donated to a charitable organization?
How long do I have to keep my records?
Do I have to file a tax return for my child?
How do I obtain an Employer Identification Number (EIN)?
Where do I mail my tax returns?
How do I determine if the individual I've hired is an employee or an independent contractor?
What is alternative minimum tax (AMT)?
What is the current annual gift tax exclusion amount?

What is the standard mileage rate?
A:
Business Charitable Medical & Moving
2017 Per mile 53.5¢ 14¢ 17¢
2016 Per mile 54¢ 14¢ 19¢

How do I value the noncash items that I donated to a charitable organization?

A: Noncash charitable donations should be valued at their fair market value. In most cases, this is a "thrift shop" or "garage sale" value.

How long do I have to keep my records?

A: The general statute of limitations on tax returns, in the absence of fraud, is three years for federal income taxes and four years for the State of Michigan. The backup documentation for income and deductions you have claimed needs to be kept for this period. For property and investments, you need to keep the documentation until three years after you have disposed of it. Copies of all tax returns should be kept permanently. Canceled checks should be kept for seven years for non-tax reasons.

Do I have to file a tax return for my unmarried dependent child?

A: A tax return needs to be filed if any of the following apply:

  • Unearned income is greater than $1,050 for 2016 and 2017.
  • Earned income is greater than the standard deduction, $6,300 for 2016 and $6,350 for 2017.
  • Gross income is greater than the larger of:
    • $1,050 for 2016 and 2017.
    • Earned income plus $350 but no more than the standard deduction for 2016 and 2017.
  • Income tax has been withheld and a refund is due, even though the income level may not be high enough to require a tax return.

How do I obtain an Employer Identification Number (EIN)?

A: Complete a Form SS-4, Application for Employer Identification Number. This form is available on the IRS forms web site or from our office.

Michigan taxpayers may choose one of the following methods of applying for an employer identification number:

ONLINE:
Taxpayers and authorized third party designees located with the United States can receive an EIN online and use it immediately. Go to the IRS website at www.irs.gov/businesses and click on Employer ID numbers.

FAX:
Receive your EIN by facsimile transmission to 855-641-6935. Complete and fax Form SS-4 to the IRS and you will receive your EIN within four working days.

MAIL:
Receive your EIN by mail in approximately 4-5 weeks. Send application to:

Internal Revenue Service
Attn: EIN Operations
Cincinnati, OH 45999

Where do I mail my tax returns?

A: The following Federal and Michigan State addresses are where you should send your tax returns if you prepared them yourself. If your return is completed by a preparer, you should contact them for the appropriate mailing addresses.

Refund or no amount due:

Federal
Department of the Treasury
Internal Revenue Service Center
Fresno, CA 93888-0002

Michigan
Michigan Department of Treasury
Lansing, MI 48956

Payment Due:

Federal
Department of the Treasury
Internal Revenue Service Center
P.O. Box 802501
Cincinnati, OH 45280-2501

Michigan
Michigan Department of Treasury
Lansing, MI 48929

Estimated Payment:

Federal
Internal Revenue Service
P.O. Box 802502
Cincinnati, OH 45280-2502

Michigan
Michigan Department of Treasury
P.O. Box 30774
Lansing, MI 48909-8274

How do I determine if the individual I've hired is an employee or an independent contractor?

A: To answer this question, twenty factors or elements have been identified as indicating whether sufficient control is present to establish an employer-employee relationship. A few of the elements are:

Instruction. A worker who is required to comply with other persons' instructions about when, where, and how he or she is to work is ordinarily an employee.

Training. Training a worker by requiring an experienced employee to work with the worker, by corresponding with the worker, by requiring the worker to attend meetings, or by other methods indicates that the employer wants the services performed in a particular manner or method.

Integration. Integration of worker's services into business operations generally shows that the worker is subject to direction and control.

Services rendered personally. If the services must be rendered personally, presumably the employer is interested in the methods used to accomplish the work as well as in the results.

Set hours of work. The establishment of set hours of work by the employer is a factor indicating control.

Full time required. If the worker must devote substantially full time to the business of the employer, the employer is impliedly restricting the worker from doing other gainful work.

What is alternative minimum tax (AMT)?

A: Tax law gives special treatment to some kinds of income and allows special deductions and credits for some kinds of expenses. Taxpayers who benefit from the law in these ways may have to pay at least a minimum amount of tax through an additional tax. This additional tax is called the alternative minimum tax (AMT). The more common items that may create an AMT situation follow:

  • Large number of personal exemptions
  • Large itemized deductions claimed for state and local taxes
  • Accelerated depreciation
  • Certain incentive stock options
  • Passive loss activity adjustments
  • Significant capital gain income

As the gap between regular taxable income and AMT income narrows, more taxpayers will be affected by this unfamiliar tax bite. It is something to be aware of when doing tax planning. Strategies that were once effective may no longer provide the benefit that they once did.

What is the current annual gift tax exclusion amount?

A: The annual gift tax exclusion amount is $14,000.

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Ann Arbor, MI 48103

Telephone: 734-662-3155
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