Do You Own a Business? Don't Overlook this Deduction

If you own your own business, there’s a good chance that you’re missing out on one big and all-too-commonly-overlooked deduction that could save you a bundle. This deduction is for business owners who utilize their personal vehicles- i.e. not a special business vehicle or fleet- for their businesses.

When you use your own car for business purposes, you can deduct all kinds of costs. Keep a mileage log, for example, and you can deduct the money you spend on gas and even wear and tear on your vehicle.

A lot of people, even those who know about the possible deductions, fail to keep a mileage log, thinking that doing so will be too troublesome and time-consuming. It really doesn’t have to be though, especially not if you determine the mileage to particular locations you frequent for business, such as your bank or your favorite meeting spot with clients. If you already know the mileage to the places you go most often, you can simply plug the figure into your calculations in a matter of seconds.

Another thing you’ll want to keep track of, in your business travels, is how much money you spend on tolls, if applicable. They can really add up, and they’re all deductible when you’re traveling for business. Either keep copies of your E-Z Pass statements each month or request a receipt each time you go through a toll booth. Do the same with any parking expenses that you end up paying, and when possible, pay for these costs with a business credit card since this will help to enhance your credibility.

When you keep track of these costs, you can simply turn them over to your accountant come tax time to enjoy your deductions. Or, you can deduct them as owner contributions or set up some other system to get reimbursed for the money you spend. All it really takes is a little bit of time and effort on your part, and it will really pay off for you in the long run.