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.