Monday, January 25, 2010

Business use of your vehicle

The question is : Can you deduct part of your car note payment for a vehicle used mostly for business? If so how much of it?

Disclaimer :  All advice is limited and general.  Individual and in depth answers come with a detailed and in depth interview with a client.

Answer :  Remembering that the key to self-employment expenses is recordkeeping.  The extent of deduction for business, is the extent that the car is used for business.  "Mostly for business", means that you are using the car for other reasons as well.  If you use the car for 50% of business, then you can deduct up to 50% of the car note and insurance and tags, and repair and maintenance etc. for business. 

Recordkeeping :  You must keep accurate records. Period !  In the event of an audit, "that's what's gone' save yo' behind" !  That is as long as you have legitimate expenses.
Your journal or log does not have to be anything fancy, but it does have to and must show consistancy.  That means that you should have daily entries.  For the vehicle you must have a starting date entry for miles....Jan 1 thru Dec 31...Business Miles             Commuter Miles                Other Miles
When you leave your home, and make your way to your permanent, or first job site, you cannot add those miles....when you leave that site to go to another job site, those are the miles that you can well, from your last job site to your home, you cannot count those miles.  You log the miles, but they will not be included in business miles.  To work, and back home are commuter miles.  Since this vehicle in question is being used for "other than business as well"...those would be considered as other miles. 
This year the standard mileage rate you will receive for operating your car for business use is 55 cents per mile.  So if you are a truck driver, this could turn into a great deal of credit.

I'll make sure that you receive all the credits you are entitled to.  Virtual tax prepartion is a specialty of mine.  Secure, accurate and affordable. Call me for additional information.

Deep discount goin' on over here !

Keep the questions coming.

Wanda E Green (Uigei)

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