Vechicle Deductions - You Have A Choice
July 6, 2008
On July 1, 2008 the standard mileage allowance rose to 58.5 cents per mile (used to be 50.5). What does that mean for you? Well, not much, unless you are able to write off the mileage you drive for your own business or for your job that you're required to travel for. 8 cents per mile does not seem like much of an increase but look at it this way. If you drove 10,000 miles for business this year, that would equate to an extra $800 deduction for 2008! Not bad considering your keeping track of your mileage anyways. Also, you will want to keep seperate mileage records for 2008. One set for January through June and the other from July through December. The first half of the year the mileage deduction will be at 50.5 and from July on it will be the new 58.5.
With gas prices hovering around $4.20 per gallon this summer with no end in sight, you may want to look into switching to an alternative method for writing off your vehicle instead of the standard mileage method. This other method is called actual expenses. With actual expenses you can writeoff all of the expenses related to your vehicle including but not limited to gas, oil, repairs & maintenence, insurance and depreciation. The actual expense method is not for everyone, however, it will depend on what kind of vehicle you drive to determine if your better off staying with mileage or switching to actual. The main thing to look at is your vehicles gas mileage. With the small cars such as the Ford Focus or the Toyota Prius you are probably better off taking the mileage rate as these cars can easily get over 30mpg. If instead you are driving a full size pickup or SUV such as Hummer or Dodge Ram pickup then you may want to look into taking actual expenses instead mainly because of the miles per gallon these gas guzzlers get. You also need to take into consideration the amount of business use your vehicle is. Maybe it's 100% or maybe it's more like 50%. Either way it can affect how you will want to deduct your business vehicle.
Before you make the change I would strongly encourage you to set up an appointment to go over each option in detail. With gas prices at all time highs we need to make sure you are receiving the most bang for your buck. The office phone number is 517-437-4646. Call me today to schedule an appointment and lets make sure you keep your hard earned money in your pocket.