Do I save my gas receipts?Taxes for small businesses can get confusing. The IRS has rules on gas, travel, and expenses claimed on your business; these rules can change every year. One of the most commonly asked questions is about gas receipts, mileage, and car expenses for travel.
DefinitionActual Expense- The actual expense amount deducted for business purposes based on receipts.
Mileage Expense- The actual mileage amount that you use to calculate your deduction based on the rate published by the IRS yearly.
Mileage is a tax deduction that you can take for the amount of miles that you use for business. Remember, if you use your vehicle for personal and business, you can not claim your personal mileage as a tax deduction on your taxes.
One of the easiest ways to keep track of your mileage is to purchase a log book. This log book can be given to your CPA each year at tax time. In return, your CPA will look up the current rate that the IRS is giving for mileage and calculate that in your taxes.This will make your mileage deduction.
There are rules to deducting expenses for your business. For example, you can not double claim a gas expense. Your business can use actual expense deduction or mileage deduction- but not both.
At Kirby Urrabazo CPA, PLLC we are committed to helping you get the best refund possible. At Kirby CPA. "It all adds up!"