It's coming on tax time and if you drive at all for business, you'll want to be sure to log your miles for 2009, so you can legitimately deduct the cost of driving your car from your income. For 2009, the IRS mileage allowance is as follows:
- 55 cents per mile for business miles driven
- 24 cents per mile driven for medical or moving purposes
- 14 cents per mile driven in service of charitable organizations
So let's do a little math. If you drive your car 5,000 miles per year for business, at 55 cents a mile, you can deduct $2,750 right off the top of your income. If you're in a 28% tax bracket that equates to a tax savings of $770 for the year.
On the other hand, if you drive 10,000 miles per year for business, you'll be able to deduct $5,500 and in a 28% tax bracket, that equates to a tax savings of $1,540. That's a bunch-o-money back in your pocket!
But tracking mileage is soooo tedious isn't it? It doesn't have to be, and if you don't keep a mileage log, you'll have a hard time substantiating that deduction down the road. No proof = no deduction. In fact, when I lived in Philadelphia several years ago, I used an accountant who actually refused to factor in my mileage deduction unless I provided him with my mileage log, so I learned way back then the importance of keeping an up-to-date log on a daily basis. Trying to re-create every trip you've driven for even a week is torture, and it would be impossible for several months or more. Save yourself the aggravation and do it every day. The simplest way to track your mileage and track it accurately is to create...
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