Tax Tips: Claiming automobile expenses

If you use your automobile for your job or business, you might be able to take a deduction for the expenses associated with those business miles. There's a catch, however. You must track your mileage and be able to document the number of miles driven for business purposes.

After you have added up your mileage for the year, you have two choices. You can multiply those miles by the standard rate of 48.5 cents per mile (for 2007) and deduct that total. Your other option is to keep track of fuel, repairs, oil changes, depreciation and other costs to operate your car. You can then allocate those costs between your personal miles and the total business miles you calculated, and deduct the portion related to the business miles.

Most taxpayers use the standard mileage rate because it's easier. A word of warning, however: many taxpayers do not keep track of their actual mileage, as required by the IRS. This is like playing with fire if you ever get audited. The IRS will likely disallow that deduction if you can't provide proof of actual business miles driven. One other thing to note: Your commute is almost never deductible. About the only exception to this is when you're driving to a temporary work site.

Tracy L. Coenen, CPA, MBA, CFE performs fraud examinations and financial investigations for her company Sequence Inc. Forensic Accounting, and is the author of Essentials of Corporate Fraud.

2018 Tax Reform Impact: What You Should Know

Congress has passed the largest piece of tax reform legislation in more than three decades. The bill will affect the taxes of most taxpayers, but one key point to keep in mind is that for most people, the bill won't affect your taxes for 2017 (the one you file in 2018).

Read More

Brought to you by TurboTax.com

Video: How to Estimate the Value of Clothing for IRS Deductions

Learn how to estimate the value of clothing for IRS tax deductions as charitable donations. The value of clothing donations to charity are based on published lists of retail values or current thrift store prices. List your donation values on the Form 8283 with the help of TurboTax in this video on filing annual taxes.

Read More

Brought to you by TurboTax.com

The Top Tax Myths (and What Happens When You Believe Them)

Don't get caught believing in any of these myths when it comes to your taxes.

Read More

Brought to you by TurboTax.com

Video: What Are Tax Tables?

The tax tables issued by the federal government and many state governments determine what amount of tax you owe based on your net income after deductions and exemptions. See how your tax status affects your position on the tables in this video on tax basics.

Read More

Brought to you by TurboTax.com
Read Full Story