Sunday, February 20, 2011

Keep a Business Mileage Log for the Tax Deduction

Business mileage deduction is an easy way for small businesses and their owners to save money on their taxes. The 2011 IRS standard mileage rate is 51¢ per mile. Over time, this amount adds up and helps offset the ever-rising cost of gas. To take advantage of this tax deduction, be sure to keep detailed records and research which trips count towards your business mileage.
Here are some common but frequently overlooked trips that apply toward your business mileage:
1. Driving from your home office to meet a client for business purposes.
2. Driving to make bank deposits or other business transactions.
3. Driving to pick up mail (from your P.O. Box or from your UPS store).
4. When you drive to the post office—to buy stamps (for your business of course) or send business mail.
5. When you drive to an office supply store to make purchases for your business.
6. Stops along the way during a business trip, such as for food or bathroom breaks (obviously within reason).
7. Just about any driving that involves your business can be counted, except for your commute to and from the office.