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How to keep track of business car expenses?

How to keep track of business car expenses?

Question: How do I keep track of the business use of my vehicle? Answer: You can use either of two methods to account for your deductible business use of a vehicle. 1. Actual expenses. The first and most cumbersome is to keep track of all your expenses, such as gas and oil, license, insurance, and repair bills. You total all your expenses and take a percentage of that total based on the business miles driven in relation to the nonbusiness miles driven. 2. Standard mileage. Your other choice is to use the standard business mileage rate announced by the IRS each year. This is a flat rate that is multiplied by the total business miles driven for the year. In addition you can deduct your business-related parking fees and tolls paid. If you are an employee and use your personal vehicle for business purposes, special rules apply. Check with your employer to determine whether they will reimburse you for the use of your vehicle.

IMPORTANT NOTICE: To ensure compliance with Treasury Department regulations, we advise you that, unless otherwise expressly indicated, any federal tax advice contained in this message was not intended or written to be used, and cannot be used, for the purpose of (i) avoiding tax-related penalties under the Internal Revenue Code or applicable state or local tax law provisions or (ii) promoting, marketing or recommending to another party any tax-related matters addressed herein.

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