Business Expenses Part 1-Transportation
Photo by: Paul Keleher
When it comes to business expenses the list can go on and on. But over the next few days I will be covering a handful that you are able to deduct when you file your taxes. Today, I will cover transportation expenses that you might encounter. Now the IRS classifies transportation expenses to include only the cost of transporting the employee from one place to another in the course of employment when the employee is not away from home in travel status. This deduction will be an itemized deduction from AGI. Now something that would not be allowed is the cost of commuting to work. These costs that you incur can not be deducted, however if you work two jobs the cost of going from one to the other can be deducted. The costs of going to a temporary work station are allowed to be deducted. If you are using your personal automobile for this driving to and from places there are two ways in which you could find out what your deduction is. The first and less common way the the Actual Cost Method. First you must figure out the percentage of business use that you use your car for in the fiscal year. Then you would add up all of your expenses and multiply that by the percentage of business use and that will be your deduction. This can get very tricky so the more used method is the Automatic Mileage Method. When using this method you first keep a running total of all the business miles you drive during the year. Then at the end of the year you take that total and multiply it by the mileage rate which for 2009 is $.55 per mile. The total that you get here would be your driving deduction. If you would like to get extremely in depth information on this or any other tax information, consult your local CPA in your area.
