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Old 24th January 2007, 11:56 AM   #1
Royal
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Join Date: Jan 2007
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Default Income Tax Worries

I just started my business this year. I haven't been keeping track of my gas mileage, but I want to write it off. Do I have to go back a write a journal or just estimate how many miles I have traveled.

Thank you,

Wayne

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Old 25th January 2007, 04:00 PM   #2
Hamilton
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Wayne,
A good faith estimate is usually adequate...but be conservative. The deduction is, I believe, $.45/mile this year. From this point forward, I strongly suggest keeping a logbook in your car, and track your mileage.


Last edited by Hamilton; 25th January 2007 at 04:02 PM. Reason: Add my website address
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Old 25th January 2007, 04:07 PM   #3
Logan
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Welcome aboard

Good to have an accountant with us. Last year my acct said the same to me.

Brantt, you can add a signature to your profile with your business/website and that will be included each time you post. See this for help

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Old 26th January 2007, 03:48 PM   #4
Hamilton
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Thanks, it seems to be working now
I'll be around alot, I'd guess. This is a GREAT forum.
Drop me a line if I can be of any assistance.

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Old 29th June 2007, 08:37 AM   #5
SeattleCPA
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Regarding mileage, one of the popular references on tax laws (Quickfinder) suggests you sample a week a month, come up with average weekly miles, multiply that weekly average by the number of weeks you work in a year, and call it good.

A couple of comments: First, only your business miles are deductible (and not commuting miles or personal miles). Second, you're talking here about using the standard mileage rate, but you can also base your auto expense on your actual expenses. (Basically, you track all your expenses, calculate your business use as a percentage such as through above mentioned sampling, and then take deduct that percentage.)

For what it's worth, I think that the standard per mile rate is usually optimal. One commonly see people go to enormous work to save an extra, like, $200 in taxes.

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Old 22nd August 2007, 03:04 PM   #6
ASpaventa
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Default Receipts, receipts, receipts!!

The best thing to do is to keep a journal along with gas receipts. The more detailed you get the better. You can guestimate on your return but should the IRS audit you they will rake you through the mud if you don't have proof of miles driven. It's always best to do some legwork now should something go wrong later. And remember, you only need to keep those records three years. If three years passed and you filed on time for all years, you're in the clear. The IRS is a tricky tricky entity. Best protect yourself and be proactive!

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