On December 31, 2010 you should record the odometer reading for each car, truck or van you use in your business. File this information with your 2010 records. Next, record the odometer readings as of January 1, 2011 and file this with your 2011 tax records.
You want to record odometer readings at the beginning and end of each year so you can calculate the total number of miles you drove your vehicle in the year. This will be used to help determine the percentage of miles you drove for business purposes each year. If you use the standard mileage method of claiming vehicle expenses you can deduct this business percentage of your vehicle loan interest and vehicle property tax.
If you use actual mileage method of claiming vehicle expenses you can deduct the business percentage of all your vehicle expenses (gas, oil, repairs, insurance, vehicle depreciation, loan interest, and so on).
If you didn’t record the odometer reading of your vehicle on January 1, 2015 try to estimate it for purposes of claiming vehicle deductions. If you serviced your vehicle close to this date, look on the work invoice where the odometer reading may be recorded. You can always take the total number of miles you have driven the vehicle since you owned it and divide it by the number of months you’ve owned it. Multiply this average monthly mileage by 12 to estimate your 2015 mileage.
Vehicle deductions can add up quickly so it pays to keep accurate odometer readings each year.
Tom Copeland – www.tomcopelandblog.com
Image credit: wn.com
For more information, see my book Family Child Care Record Keeping Guide.
Copyright 2010, Tom Copeland, www.tomcopelandblog.com