Standard Mileage Deduction

Posted by | February 26, 2013 | Tax Tips | One Comment

auto expenseEver use your car for business purposes? You can probably deduct some of the expense on your tax return!

There are two methods for deducting auto expenses.
Method 1: Actual expenses (gas, repairs, maintenance, etc)
Method 2: Standard mileage deduction (see below)

Today, we’re going to focus on the 2nd method and how it applies to self-employed entrepreneurs.

First off, if you want to use the standard mileage deduction, you must use it in the first year the car is used in the business. If you use actual expenses in the first year, you can’t use the standard mileage deduction in the 2nd year.

If your main place of business is your home office, you can deduct the mileage from your home to your clients. Just be sure to record each and every trip. I suggest keeping a log in your car or purse.  It needs to record the following pieces of information:
-Date of trip
-Purpose of trip
-Starting and ending location
-Total miles (round trip)

Resource: IRS Publication 463

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Amy Northard, CPA

The Accountant for Creatives
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