If you are like me, I forget to write down my business mileage, or I lose my notes. What is even worse is that my CPA said that mileage deductions is one of the first items that auditors look at when you turn in your paperwork.
The app that we use has saved our bookkeeper time, the inspectors time and has eliminated frustrating conversations about losing Post It notes with mileage scribbles. We do not even talk about mileage write offs anymore. Mileage is on one digital document.
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Mileage Deduction 101: Everything You Need to Know About Deducting Mileage for Business
If you drive your car or other vehicle for business purposes, you can take a mileage deduction of 54 cents for every mile you drive for work in 2016 (57.5 cents per mile for 2015). Here is everything you need to know in order to get the most out of your mileage write off.
The important thing that you need to know when planning to take a mileage deduction on your taxes is that you can only deduct trips that are for business.
What Types of Business Driving Qualifies for a Mileage Deduction?
*Travel between offices - You can take a mileage deduction for travel from your office or work site and your drive to a second place of business.
*Errands/supplies - Driving for business-related errands such as trips to the bank, office supply store or post office all qualify for a mileage deduction. Additionally, these small trips add up quickly and many business owners forget to keep track of these drives.
*Business meals and entertainment - You might not realize it, but all of the trips you make to meet with clients or vendors for dinner, coffee, drinks, etc… all qualify for a mileage deduction.
*Airport/travel - The miles you drive to and from the airport for a business trip.
*Odd jobs - If you’re earning an income from odd jobs such as babysitting, pet care or lawn work, all of the drives to and from those locations can be written off.
*Customer visits - Driving from your office or other work site to meet with customers or clients for business at an office or job site qualifies for the standard mileage deduction.
*Temporary job sites - Driving from home to a temporary work location that you expect to last (and does in fact last) less than one year.
*Job seeking - If you are a job-seeker, you may deduct the miles that you drive to find a new job in your current occupation. However, you cannot take the mileage deduction if you’re looking for a job in a new industry for the first-time.
The info below is from the IRS website:
2016 Standard Mileage Rates for Business, Medical and Moving AnnouncedIR-2015-137, Dec.17, 2015
WASHINGTON — The Internal Revenue Service today issued the 2016 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes.
Beginning on Jan. 1, 2016, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be: