Deducting Mileage on Your Taxes by adnan.spesial


									                      Deducting Mileage on Your Taxes

This article is going to talk about a common but valuable business tax deduction, vehicle
mileage. When you deduct your vehicle mileage, you keep track of your mileage and then
multiply it by the standard mileage rate. You then take that amount and deduct it on your
taxes. For example, in 2010, the mileage rate was 50 cents per mile. So if you drove
20,000 miles in 2010 you would have been able to deduct $10,000.

If you choose to keep track of mileage, you will need some sort of way to record the
mileage. The most common method is to use a mileage book that can be purchased at any
office supply store. In it, you find a place for the date, purpose of the trip, and beginning
and ending miles. This is the best way to track miles and the most accepted by the IRS.
However, in the real world it is not always practical and almost never kept up. We get in
such a hurry and don't take time to write it all down. Another commonly used method is a
small calendar. Many people write down where they went and the total miles for the day.
There are also computer programs and phone apps that you can purchase as well. For
example, the newer version of QuickBooks has a section to record your miles.

If you have certain places you go all the time, it is easy to record those miles and it is
appropriate to keep track of when you go there. For example, one of our clients owns a
sandwich shop. There are certain places they go every day. They go to the bakery to pick
up rolls; they pick up the produce; and have to go to the bank to make the previous day's
deposit. One day they clocked the miles and recorded it in the front of a mileage book.
Every day after that, they simply recorded the total miles. If they have to make extra trips
they add them to the book. This is a perfectly acceptable way to track miles.

However, you choose to record your miles the important thing is to be consistent and
accurate. If you have more than one vehicle that you use, you will need to record the
miles for each vehicle separately. If you have a vehicle that is used exclusively for
business, in other words you do not use if for personal activities, then you can record the
mileage at the beginning of the year and then again at the end of the year. It must be used
only for business though.

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