More and more people are starting to put their car to work for them by becoming independent contractors. Whether you’re a ride-share driver, real estate agent or an SAT tutor, if your job takes you on the road, you can take a mileage deduction of 53.5 cents for every business-related mile you drive in 2017.
But what exactly can and can’t you write off? And what should you be doing now to make the most of your deductions? We spoke to the experts at Intuit QuickBooks and here is everything you need to know to get the most out of your business mileage write off.
1. Know Your OptionsDid you know there are two ways in which you can deduct vehicle expenses? The first is the actual expense, the other option is the standard mileage. The actual expense means you can deduct all the expenses you have on your car: gas, repairs, depreciation, fees, insurance, etc. To do so, you add up all the expenses and multiply that number by the percentage you use your vehicle. The standard mileage means you can deduct 53.5 cents for every business mile you drove that year. Whether you choose the actual expense or standard mileage, one thing to remember is that the IRS wants you to record all the miles you drive for business. |
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2. Manage Deductible MilesMileage is one of the biggest deductions you can earn, so it’s important to know the game. Anytime the rubber hits the road when you’re on the clock, start recording. Some common deduct-worthy business-related trips include: • Driving to pick-up clients Important to note: If you deduct your gas expenses with the actual expense method, you can’t deduct your mileage. The inverse is also the same. |
3) Track Your TripsAt the end of the year, no one enjoys the stress of trying to figure out expenses and deductions. However, if you want a mileage deduction, you’re going to need to know how many business-related miles you drove. To keep an accurate log, some keep a notepad in their vehicle and write down every work trip they take. However, this tactic can be rife with mistakes, easy to lose, and easy to forget to do after every trip. The other option is downloading an app that does the work of tracking miles and calculating mileage deductions for you. With QuickBooks Self-Employed, you can automatically track the miles you drive, then easily sort them into either business or personal miles to learn how much each business trip earned you in deductions. At the end of the year, there’s no guesswork on how many miles you drove, and you can be certain that you’re going to get the maximum deduction for your expense. |
Whether you’re deducting the actual or standard mileage, there are so many write-offs you can enjoy: from your car registration and mileage to insurance and repairs. With just a little planning, and an app to help, you could save more of the money your earn.
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