AUTOMOBILE | Is your car costing or saving you money?

Even though we spend so much more time than before online interacting virtually we must get out and about – our customers and clients enjoy seeing us! So owning an automobile of some type is a necessity for business owners. And guess what…

The IRS is giving us a perk, a/k/a deduction. Beginning January 1, 2015, the IRS raised the standard mileage rate for car, van, pickup or panel trucks standard mileage rated from 56 cents to:

• 57.5 cents /mile for business
• 23 cents/mile for medical or moving purposes
• 14 cents/mile in service of charitable organizations

As taxpayers, we have the option of claiming actual mileage or operating costs. Mileage, of course, is the number of mile driven for business, and operating costs can include:

• Depreciation
• Insurance
• Repairs
• Tires
• Maintenance
• Gas
• Oil

Making the decision, mileage or operating costs, is a discussion to have with your tax expert. Whichever way you chose you must keep track of your mileage! At the beginning of each year I write down (in a master business calendar) my car’s current mileage and then I continue to add appointments – making notes of where I went, who I met with and what was covered.  Remember that the IRS loves documentation (and so does your CPA).

Photo Credit: ​https://www.flickr.com/photos/pictures-of-money/17307620362