If you chose the standard mileage rate to deduct your vehicle expenses for your business use, NOW–right now–is the time to record your odometer reading.
You will want to have total miles driven for the year and miles driven for business purposes. Business miles will, of course, come from your record of business usage of your vehicle.
2008 Standard Mileage Rate for business use is $0.505 (that is 50.5 cents) deduction per business mile driven.
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Glenna Mae Hendricks. She is an entrepreneur and income tax consultant, so we get lots of good tax tips from her. She is an oenophile (“look that up in your Funk and Wagnall’s,” she says), and a wine enjoyment teacher/guide who also writes wine notes at the Allen’s Retail Liquors site. Her political thoughts (and occasional outbursts of domesticity) appear at Old Feminist and Wild-eyed Liberal.
Just a reminder that you have the option to choose between the standard rate and actual expenses, whichever is greater, as long as you use the standard rate for the first tax year that you use your vehicle in business.
So, if you use actual expenses the first year, you’re stuck with that method for the rest of the time you use that particular vehicle for business.
If you use the mileage rate the first year, then you’ll be able to switch to actual expenses for any year that gives you a bigger deduction.
Thanks, Sheryl! We can’t have too many reminders of these basics.