Want to pay less tax? Track your expenses. Here are a couple of tips that our clients have used to make that task easier.
But first, here’s why it is so necessary. Year after year, I see clients miss out on legal tax deductions because they didn’t track the expenses properly. They either forget how much money they spent (because they paid cash and had no receipt) or they don’t remember exactly what the expense was for. Then when the IRS or state revenue department auditor wants to see proof – well, there is none. That means taxes, penalties and interest. No fun.
One expense people often get wrong is the auto expense. If you have a business, you can take a deduction for the business percentage use of your car. Or you can take a deduction based on the mileage you put on your car during the year for business. Which one is best? Do the math. Which one gets you the biggest deduction?
Either way, there is one thing you’re going to need to know: the mileage you put on your car for business. Chances are you come close to estimating total mileage or can pull that off of auto maintenance records.
But how will you calculate how much you used for your business?
We’ve got two little quick tricks on this:
- Download milebug app for your smart phone. You just turn it on when you travel for business, or
- Take a picture of your odometer when you start a business run and then take a picture of your odometer when you’re done with the business. At the end of the year, calculate all the miles you’ve travelled for business.
Want to learn more? Tune into our webinar Real Estate Deductions You Can Still Take LIVE this Saturday or via REPLAY on Sunday. We’re going to cover practical advice to keep more deductions.
Here is the link to Saturday’s webinar: http://www.DianesSeminars.com