Miles for Dollars
Of course during this time of year, when spring starts, and one starts planning for the summer holiday, on looks of the costs of traveling, especially if gas prices will go up or at least be at a stable level, and of course back earlier this year we saw a drop of oil and gas prices. So, what can one do on a tax return about paying for gas and other expenses on the use of one’s vehicle? Well of course, the vehicle must be used for business purposes, but how to claim vehicle expenses (including gas).
First of all, one has to realize that the common use of a vehicle is to commute from and/or to home to and/or from work (or any other place of business), and such common commuting is not considered as business use of a vehicle, because everyone commutes. However, if one uses a vehicle to go t and/or from one place of business to another, then that is using a vehicle for business purposes.
There are two ways to claim using a vehicle for business. The first method of course is to total the actual expenses of using a vehicle for business purposes (e.g. gas, repairs/maintenance, registration, etc., even depreciation), it may be a burden some process, but every dollar helps on a tax return. The second method is to use what is called standard mileage, which is a certain dollar amount per mile (for 2014 it is 56¢ per mile, for 2015 it is 57½¢ per mile). Remember we are talking about business miles, which means no miles for commuting and/or using a vehicle for pleasure.
So, which method is best to use? Well, if one looks at one a mathematical perspective, the heavier and/or older a vehicle is, the more it is going to cost a person per mile, than lighter and/or a newer vehicle.
So, if you think you are using your vehicle from going place to place on a daily basis, other commuting to and/or from work, then contact us , we would more than happy to go over of which method is best for you in claiming the use of your vehicle for business purposes on your tax return.