Can I deduct my mileage?
By Ken McEntee
Many business owners and employees use their personal vehicles for business, or may have company-owned vehicles they sometimes drive for personal use.
In any case, thorough record keeping will help you to maximize the tax deduction you’re entitled to, says Gary Cerasi, CPA, owner of Creative Business Strategies. He discusses the issue here:
Q: Am I entitled to a tax deduction if I use my car for work?
A: If you are self employed, yes. If you are an employee, no, as a result of the new tax reform laws. The business owner may deduct the “business use” of the personal automobile, but must have proof of the business usage.
Q: What proof?
A: You’ll need a detailed mileage log showing every trip you made and every stop you made with your vehicle. You must also verify your odometer readings.
Q: What can I deduct from my taxes?
A: You have the choice of deducting a standard mileage rate per business mile—currently 54.5 cents per mile—or deducting actual expenses, such as fuel, insurance, repairs, depreciation and interest or a lease payment. The expenses deducted must be properly apportioned between personal and business use.
Q: What if I use a company-owned car for personal driving?
A: Your business will be able to deduct only the business usage of the vehicle, so you’ll need to keep a mileage log. You typically have to claim personal use of a company car as income for tax purposes. This is subject to payroll taxes as well.
Q: As a business owner using a car for business and personal driving, is it better for me or my business to own the car?
A: I always recommend if there is any personal use on a vehicle, spend all costs personally and then take a reimbursement from the business for the business use of the vehicle.
You can learn more by scheduling a no-cost consultation with Gary, at 440-546-9359. Creative Business Strategies is located at 192 East Wallings Road, in Broadview Heights. You can learn more at CreativeBizStrat.com.