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  • Automobile deduction

    There are really two choices you have regarding business deduction of automobile expenses.

    One is taking the actual business miles driven times the current IRS mileage rate.  The current rate should be found on my website with a little hunting around.  You will need to keep a log of all your mileage on the vehicle you use for business.  Office Depot and Office Max are two stores where I have seen them and the log cost less than $5.00. Record where you go on that day (both for business and personal) in the log and it would be a good idea to save fuel receipts, repair bills, and tune ups as further proof to IRS of the use of the vehicle.

    The second is the actual expenses method.  With this method, you may depreciate your business vehicle.  In addition, use a log again as mentioned in the last paragraph to arrive at your business use of said vehicle.  The costs will be deducted based upon business usage percentage.

    You really don't want to be scrambling to recreate your log after an entire year. Get into the habit of organizing your receipts so year end tax preparation is a snap and you increase the chances of maximizing your deductible expenses.

    Richard J. Garcia | 02/08/2010