Are you logging your business miles? Yikes! Yet another thing small business owner have to track. A huge percentage of people use their cars for business, but surprisingly few actually document that use. It just seems like too much hassle. Besides, it’s hard to track down all those little scraps of paper and McDonald wrappers on which you wrote the mileage!
All kidding aside, here is a simple exercise for those of you who feel it is too much hassle to record your mileage. Next time you drive somewhere for business, stop every 3 miles, roll down your window and throw out a dollar bil. Get the picture?
Taking an extra 20 seconds to log in and out when driving for business, charity, medical purposes or reimbursable employee miles adds up to huge savings. In 2009, the standard mileage rate is 50.5 cents a business mile. The mileage rate when giving services to a charitable organization is 14 cents a mile and you will receive .24 cents a mile when computing medical or moving expenses. Not doing this could be costing you thousands of dollars per year!
Note: A taxpayer may not use the business standard mileage rate for a vehicle after using any depreciation method under the Modified Accelerated Cost Recovery System (MACRS), after claiming a Section 179 deduction for that vehicle, for any vehicle used for hire, or for more than four vehicles used simultaneously. Revenue Proc 2004-64 contains additional information on these standard mileage rates at www.irs.gov.