Jack Woods

 

Central Business Solutions 

301 Lynnfield Street, P.O. Box 3169 Peabody, MA 01960

 

Phone:  978-532-0266

Fax:      978-532-9105

 

1147 Main Street, Suite 213, P.O. Box 299 Tewksbury, MA 01876

 

Phone: 978-851-8044

Fax:     978-851-9332

 

Email: jack@cbps.com

March 2021

March 2021 Q&A

Question and Answer

Question:
I will claim an automobile deduction on my tax return and have used the standard mileage rate in previous years. However, in 2020 I incurred significant car expenses that will outweigh the standard mileage deduction. Can I switch to deducting actual costs for 2020?


Answer:
Yes, you’ll be able to switch to the actual expenses method if you own your car and you used the standard mileage rate in the first year that you used your vehicle for business. The rules are different though if you lease your car. If you’re leasing your car, you’ll need to take the standard rate for the entire lease term.


Question:
I’ve heard that I should have errors and omissions insurance, but I’m not sure what it is and why would my business need it?


Answer:
Generally, errors and omissions (E&O) insurance protects against litigation claiming you made a mistake while providing a professional service. Some of the common types of claims that E&O insurance covers include: negligence, errors, omissions, misrepresentation, and inaccurate advice. This type of insurance usually covers court costs and settlement amounts, which can quickly add up. If your business is vulnerable to such lawsuits, then you should consider carrying E&O insurance.


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