Small Business Advice, Is it Business or Personal?
Business owners often overlook automobile mileage and expenses as viable tax deductions. The mileage rate set by the IRS for 2017 is 53.5 cents per mile driven for business purposes. If this is your first year of business, keep both mileage records as well as expenses for your automobile. Expenses for your automobile include items such as mechanical repairs, tires, fuel/gas, licensing. At the end of the year, you can then evaluate whether to use the mileage rate allowed, or actual expenses for the use of the vehicle.
Keep a tablet in your car, and write down your miles (either odometer readings or total miles traveled) whenever you travel from your place of business for any business purpose. Business purposes can include traveling to and from the business supply store to buy toner for your printer, trips to take potential customers to lunch, or driving to attend marketing meetings. Just make sure you are only counting the miles you spent traveling to and from your place of business. (This does NOT include your commute to work and back unless you “conduct business” en route.) You can find more information in Publication 463 on the IRS website at www.irs.gov
If you use your vehicle primarily for business with occasional or rare use for personal jaunts, it might be easier to note the mileage when you first began business use of the vehicle, and only record the miles of the occasional personal use. Either way, when you get in the car, get in the habit of thinking, is this business use or personal use today? Where am I going, what am I doing, is it business or personal? An example might be: The van is used for business, but you are helping a friend move over the weekend. You would record the weekend use as personal. The rest of the time, the only things to keep track of are gas, repairs/maintenance, tires, licensing.
Tip: An easy way to keep track of fuel usage is to have one debit or credit card used exclusively for business. That way you don’t have to keep a bunch of receipts since the expenditures are recorded either by the bank, or the credit card company. You can also use that same debit or credit card for other business expenses exclusively (meals and/or lodging when on a business trip, office supplies, etc.)
When managing a business, owners should spend their time focusing on building and growing their businesses, not on the day-in, day-out accounting tasks. That’s where Panhandle Accounting comes in; someone professional and experienced, keeping track of your finances, processing payroll, bookkeeping set-up and services, and tax preparation and consulting so you can focus your attention on your customers and clients. “Call today and let’s see what I can do to help!” 208-290-6716. Services available locally & remotely via email.
by: Ann Dutson-Sater
Ann Dutson-Sater is a Sandpoint native. She holds a Bachelor’s degree in Business Administration with emphasis in Accounting, has been involved in the business world for over 25 years. Ann was the Bonner County Clerk of the District Court from 2013 to 2015. And, she has volunteered her services to Pend Oreille Arts Council, Elks, Sandpoint Area Seniors, and Bonner County Historical Society. Ann enjoys helping start-up and small business owners.