We rely on our motor vehicles to take us to and from work and for some it is an integral component in the successful accomplishment of our jobs. Before long the odometer is showing anywhere from 15,000 to 45,000, possibly more, miles travelled in one year.
Its tax time and you go traipsing off to your preparer thinking that at almost $0.57 per mile at the top end (not to mention gas, repairs, and routine service costs) you are in for a whopping auto expense deduction which should land you right at that attractive tax refund earmarked for funding the vacation to Hawaii.
Consider the following and avoid the loveless letters for which our uncle (Sam) is famous. Oh yes, trees shudder at the roots when they hear the name Sam.
- Travelling to and from work is not deductible. No one told you to live 40 miles round trip from your job,
- Travel directly related to carrying out your job functions are deductible if you are not reimbursed by your employer and, there is an established company policy authorizing such unreimbursed travel,
- You are required to maintain a detailed travel log which may be summoned by uncle in the event that your tax returns are selected for review,
- You are entitled to claim either work-related mileage and possibly toll and parking fees as a deduction OR ….yes I said OR actual costs for gas, service, repairs, and depreciation expenses.
Heed these tidbits and avoid having a welcomed tax refund become the latest kid on the block of burdensome bills to pay as this would certainly cause the magic of the Hawaii trip to lose its glow and the souvenirs viewed with great disdain.
Call and let’s talk tax planning!