Keep A Mileage Log In Your Car To Keep Track Of Business Mileage

It is very important to keep records for all business expenses. Miles driven for business purposes can add up to a substantial tax deduction. Using a mileage log in your car is essential. Whenever you start your car, log in your mileage from your odometer. Then note whether the purpose of the trip of business or personal. If it's a business related trip, note the purpose of the trip. Elaborate enough so you can explain the purpose a year later. A sample entry might be, "23,501 / Business / Meet with John Doe to discuss new ad layout." You do not have to state the purpose of a trip that's not business related. Such an entry might be, "23,532 / Personal."

At the end of the year, just tally the miles driven for business purposes. There is an Excel spreadsheet that simplifies this task at www.steps-to-starting-your-business.com/course/mileage-log.php. According to the IRS, the 2009 standard mileage rate for business purposes is $0.55/mile. The Federal Highway Administration estimates the average car is driven over 11,000 miles per year. If you drive your car just 10% for business purposes, that translates to a business tax deduction of $605. This is a significant tax deduction making it well worth the effort to keep a mileage log in your car.

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Steps To Starting Your Business (www.steps-to-starting-your-business.com) is an online course designed to help people start a sideline business. The course is directed by weekly email assignments and supported by an online bulletin board (forum) on which students can post questions.

Sources:

Miles driven per year: http://www.epa.gov/OMS/climate/420f05004.htm
IRS mileage deduction: http://www.irs.gov/newsroom/article/0,,id=200505,00.html

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