Are you constantly driving from client meetings to networking events to more client meetings? Well, then I hope you’re taking advantage of the tax savings that comes along with all of that driving!
A portion of the cost of owning and using a vehicle may be claimed as a business expense. You may claim these, as long as you maintain records that can substantiate your business use and expenses. Use our Mileage Log to assist in your record keeping.
There are two methods you can use to determine your eligible deduction: standard mileage rate or the actual expense method.
- The standard mileage method allows you to receive a deduction of 57 ½ cents for every business mile driven. It only requires tracking the miles driven – no need to add up any receipts!
- To use the actual expense method, you determine what it costs to operate the car for the business portion of the overall use of the vehicle. This includes gas, oil, repairs, tires, insurance, and depreciation attributable to the portion of the total miles driven that are business miles. This might be a little more work, but it could possibly save you more money in the end.
- Commuting from your home to your first place of work does not count!
- Once you pick a method you must stick to it every year!
- The standard rate changes yearly, so stay up to date to take full advantage!