Claiming expenses associated with your vehicle can be a major tax deduction for many family child care providers.
The hardest part of claiming these expenses is keeping accurate records of the number of business miles you drive.
You can count miles if the “primary purpose” of your trip is for your business. “Primary purpose” means more than half of the reason for the trip is business. See my article, “How to Determine the ‘Primary Purpose’ of a Car Trip.”
Business trips can include trips to the bank, library, grocery store, Target, Costco, training workshops, conferences, association meetings, as well as trips transporting children.
The more business miles you drive, the bigger your tax deduction.
There are a variety of mileage apps available that can make tracking these trips a lot easier.
A provider at the NAFCC annual Institute recommended Mile IQ. You can use this app to automatically calculate how many miles you drive and how much of a deduction you can claim. You don’t have to remember to turn it on or off: it will automatically do the work.
At the end of the month or year you can produce a report that summarizes all your trips and how much you can deduct. This app will meet the IRS requirement of an “adequate record” to claim car expenses. You can track 40 trips per month for free. After that it costs $5.99 a month or $59.99 per year.
Here’s a listing of other mileage apps. Most are free.
What is your experience using mileage apps and which one do you recommend?
Tom Copeland – www.tomcopelandblog.com