707-584-1040 info@mayclincpa.com

Hi, I’m Tim Mayclin, CPA from Rohnert Park, California.

One of the questions I get a lot from my clients is how do they deduct auto expenses for their business? There’s two basic methods: One is actual and one is standard. For both methods, you need to keep track of the total mileage for the vehicle for the year, and you need to keep a log that shows each day where you went and how many miles it was, and what the business purpose was. The actual method is you keep track of all your gas, your oil changes, your repairs and maintenance, your insurance, all of that, and you take the deduction for the percentage that you use in business.

If you drive 10,000 miles and you use it for 8,000 business miles, you get to take 80% of that total, and that’s your deduction. In the past, the IRS from time to time has issued interim gas rates when the rates have gone up dramatically. So that’s why it’s important to keep that log on a daily basis. So on the standard method, we take the mileage that you drove for business, if it’s 10,000 miles, and multiple it by the rate. For 2014, the mileage rate is 56 cents a mile. If you drove 10,000 miles, your deduction for 2014 would be $5,600. You would deduct that on your tax return.

I hope you found this information informative. If you have further questions, please contact your local CPA.