Claiming Vehicle Expenses – The Standard Mileage Method

6a0133f3fc5805970b0153917dfe21970b-320wiVehicle expenses can be a major business deduction for family child care providers – and are often audited by the IRS. Therefore, it pays to know what you can deduct and how to keep accurate records.

You can count a trip as a business trip if the “primary” purpose of the trip is business. Primary purpose means that more than 50% of the reason for the trip is business. This includes children’s field trips, trips to the bank to deposit parent fees, and trips to trainings. A trip to the grocery could be claimed as a business trip if more than 50% of the food purchased was for the business.

You must have an “adequate record” to show that you made a business trips: calendar notations, receipts, cancelled checks, credit or debit card statements, field trip permission forms, training certificates, mileage log, photographs, and other written records. You may want to review these records monthly to make sure you’ve identified all your business trips.

Read more about the standard mileage method

Categories: Car Expenses, Record Keeping & Taxes

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12 replies

  1. is the mileage round trip or one way? Say I go to the grocery store for business groceries. Do I track the mileage one way or round trip?

  2. Count mileage round trip. You can claim a trip only if the primary purpose of the trip is business. When it is, claim the round trip miles.

  3. If I am claiming my mileage, for a contract labor job, can I claim round trip miles or is it one way?

  4. You can count round trips to a contract labor job as a mileage deduction.

  5. My daycare site is not in my home. Can I count daily mileage from my home to the site as deductions?

  6. No,because this is considered “commuting.” You can deduct business trips to and from your place of business or to and from your home.

  7. I was at one of your trainings and I remember you talking about an app that can be downloaded to a phone that can help record mileage, what is the name or that app? Thanks

  8. I had to buy a new 12 passenger van this year in October, because my old one finally gave out. I have always use the Standard Mileage with the other van, but now since I have a loan payment on this vehicle would it be better to use the actual expenses method.

    • It depends. You can always deduct the business portion of car loan interest even if you use the standard mileage rate. You will probably come out better using the actual expenses method since the van was new and you can use the 50% bonus depreciation rule. Beware that if you use the actual expenses method you will have to stick with this method for as long as you use that van for your business.

  9. So i go to the grocery store every saturday and buy personal and buisness food. I always have more personal food. Does that mean i dont get to deduct any milage for going to the grocery store?

    • You can only count a trip to the grocery store as a business trip if you buy more business food than personal food, or take longer to shop for the business food than the personal food. So, if you always buy more personal than business food, you probably shouldn’t claim any t rips to the grocery store as business trips. However, practically speaking, if you took a number of these trips as business trips, it’s unlikely that this would be challenged in an audit.

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