If you use your personal vehicle for work, you may be able to write off the costs on your tax return. To qualify, you must use your car in your job for the convenience of your employer or in your own business. You must maintain adequate records to prove your business use. If you can meet these requirements, then your unreimbursed auto expenses may be deducted.
Substantiating or not adequately documenting the business use is where most taxpayers find themselves in trouble. The best evidence is a detailed log with an entry for each trip. However, diaries, trip sheets, expense reports or similar written evidence is probably adequate.
Ideally the record should be prepared at or near the time of the business use. The best way is to keep a log book handy in your automobile to record your miles as they occur. If you plan on taking an auto deduction this year, be prepared to answer the following questions for each auto when you file your tax return, in addition to your daily mileage log:
- Do you have evidence to support your deduction?
- Is your evidence written?
- What is the total business and total personal mileage for the year?
- What was the beginning and ending odometer reading for 2015?
There are generally two methods for computing your auto expenses: the standard mileage rate method and the actual cost method. Normally you can use whichever method gives you the largest deduction. Whether you’re using the standard mileage method (56 cents per business mile for miles driven) or you’re writing off your actual costs, you will need to keep your daily mileage log. Make sure you have all these totaled and documented before you come to see your tax preparer.
STANDARD MILEAGE RATES
Note that rates are changing for TY 2015!
Year 2016 2015
Business 54.0 cents 57.5 cents
Medical 19.0 cents 23.0 cents
Moving 19.0 cents 23.0 cents
Charity 14.0 cents 14.0 cents
Call Tax & Accounting Plus today at 309-827-4010 for your appointment.
