When tax season rolls around, it is important to have all your records straight and file as a well informed citizen in order to get the best return possible. No one can avoid paying taxes for very long, but everyone can get a break if they know how to play the game. By keeping good records of your expenses, you can get significant deductions on your taxes every year. All it will take is a little bit of knowledge, a little extra paperwork, and a lot of good organization. If you want to claim transportation expenses as deductions on your taxes, this is the way to get started.
Small business owners and independent contractors have the greatest potential for writing off transportation expenses on their taxes. Taxes may already be somewhat complicated for people in these positions, so enlisting the help of a qualified accountant would be wise. Whatever your line of work, if the job requires lots of traveling without reimbursement for mileage and expenses, you may be eligible for hefty deductions. Commuting to the office every day does not count, unfortunately, but consistent field trips to surrounding areas on work assignments in your own vehicle should qualify.
You will need to keep detailed records of all your transportation expenses. Keep a small notebook in the car and enter into it all of your work related travel information. Include dates, destinations, and mileage according to odometer readings at the start and finish of your trip. Include receipts for gasoline, oil, and other maintenance or upkeep expenses. Maintaining your vehicle for the purposes of work qualifies you for tax deductions, whereas the same for a leisure vehicle does not. If your car or truck is a multi-purpose vehicle, used for both business and pleasure, be sure to make distinctions between these purposes. It may benefit you to invest in a dedicated work vehicle to avoid the messy complications involved in declaring expenses on a multi-use vehicle.
When it comes time to actually file your taxes, all that record keeping will pay off. Use Schedule C on your tax forms to declare all business related transportation expenses. Add up everything according to the details on your paperwork and determine your potential deductible. Other travel expenses such as air-fare, taxi rides, parking, and car rental may also work to your advantage. If you’ve kept accurate records of these business related expenses you can also include them in your filing. After completing Schedule C you can file it along with your standard 1040 to deduct your transportation expenses.
Throughout this whole process, be sure that everything is accounted for. Make sure that your vehicle is properly titled and insured, and look into policies on sites like AutoInsuranceQuotes.net to get the best coverage for your business vehicle. If you’ve neglected any small technicality your deductions may be thrown out and you could risk getting fined or audited depending on the severity of the issue. As long as you make sure to cross every “t” and dot every “i” you should be fine. There’s no need to be nervous if all your records are in order, so get the most out of your taxes by declaring your transportation expenses.