Tax Tips & Advice : How to Deduct the Cost of a Vehicle Used in Business

Tax Tips & Advice : How to Deduct the Cost of a Vehicle Used in Business

Oh man, are you driving around as much as
I am? With gas prices these days, that’s difficult. Do you ever wonder, well how can I deduct
the cost of a vehicle, that I’m using for business? Hi, my name is Danielle Loughran.
I’m a CPA with Excel, and I’m here to help you with this topic. There’s several ways
that you can deduct the, either mileage, or the actual card, that you’re using for business.
The most common and easy way, is probably going ahead and keeping a mileage log, and
deducting whatever you drove, for legitimate work purposes. How does that work? From your
house to the office, that’s not deductible. It’s the mileage that you exceed, from once
you’ve already got to the office, so for instance, if you’re driving to your office, and then
you have to drive to an amusement park to see a client. Wouldn’t that be nice? That
whole trip from the office to the amusement park and back, is deductible. For the first
half of 2008, through July 1st, that deductible rate is at fifty and a half cents, and then,
it’s up to fifty eight and a half cents, from July, all the way through December. It’s important
to remember to keep a mileage log. The other method that you can do, to deduct your vehicle
for business purposes, is actually capitalizing the vehicle, and then calculating depreciation.
The only problem with this, is once you use that method, you do not have the ability to
switch over to recording mileage, and I think that one attracts some IRS attention, a little
bit more than just having a good, solid mileage log. Again, my name is Danielle Loughran,
with Excel, and I hope that I’ve helped you figure out how to deduct your business mileage.

About the Author: Michael Flood

1 Comment

  1. I am self employed, LLC looking to move in with my mom to take care of her about a hours drive, I own a small janitors cleaning business. My office will be in my moms house. I show up to the same jobs everyday. can i deduct them miles? this will be 60 miles to work and 60 miles back to work 5 days a week.

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