Deducting auto expenses

20 August 2013 / Video Blog / Comments Off on Deducting auto expenses

Welcome to another edition of Tuesday Tidbits where we make tax and accounting simple. I'm your host Charles D. Shapero CPA with Widget Bookkeeping and Tax, and today I want to talk to you about deducting auto expenses. When you're deducting auto expenses, there are two methods to deduct your auto you can use the standard mileage rate, with the IRS approved standard mileage, or you can deduct actual expenses. WIth the standard mileage rate, it's very easy, you simply track your business miles that you spend during a given year, multiple it by the standard mileage rate, which for 2013 is 56 and a half cents per mile and you have your auto deduction, what that includes is gas, oil, repairs, depreciation on the vehicle, and everything except tolls and parking. which you can add on to the standard mileage rate That's pretty simple, with the actual expense method, we have to save all our receipts for our our gas, our insurance, our repairs, plus we need to calculate depreciation on the purchase price of the vehicle, again we can deduct our tolls and our parking. In this method, the actual expense method, we have to track two sets of mileage personal and business. Why? Because all of that bucket of expenses needs to be split between this the personal portion of your gas, and this is the business portion of your gas This method, when you use actual expenses, people like it because they think they don't need to keep a mileage log, but it actually ends up being almost twice the amount of work. and in a lot of cases, it results in an inferior deduction. Standard mileage is a very nice deduction, now there's factors such as mileage rate and the age of the vehicle that come into play. But by and large, you should takl to your CPA to find out which method works for you. In next week's Tuesday Tidbits, we're goinna talk about what needs to go into your mileage log. This concludes today's tidbit, see you next Tuesday. Widget Bookkeeping & Tax, know more, keep more.

Tags: , , , , , , , , , , , , , ,

Back to top