The No. 1 tax expense you're forgetting to claim

Tax Hacks 2015: Avoid These Common Tax Mistakes


Most businesses do not own a vehicle or a fleet of vehicles. That's why the expense that is most overlooked by business owners is the cost associated with the use of personal vehicles for the business.
Many owners believe the use of a mileage log is burdensome. That may be, but you're leaving money, perhaps thousands of dollars a year, on the table if you fail to track these expenses. Here are some tips to help you get started:

Most of us are creatures of habit and travel to the same places, shop at the same stores, go to the same bank, etc. If you drove 100 miles on business errands, your expense write-off is $57.50 for 2015 and $56 for 2014. This can be significant, as mileage accumulates quickly. To simplify tracking of these routine trips, make a list of mileage from your business to your bank, post office, office supply stores, grocery stores, business association meeting locations, franchise meetings, etc. That way, all you have to do is track where you went, and you can calculate the mileage afterward.

Today you also have a choice of apps to make tracking mileage easier. These are especially helpful if you aren't good at keeping a traditional mileage log in your car. Whatever way you choose to track, your mileage 'master log' needs to be updated as your travels change and locations change. This master log will also help you keep track of other expenses you incur while traveling to those common locations using your personal vehicle.

Related: Important tax dates to know.
10 PHOTOS
Important tax dates to know
See Gallery
The No. 1 tax expense you're forgetting to claim

January 15, 2016: Those who are self-employed or have fourth-quarter income that requires payment for quarterly estimated taxes must have them postmarked by this date

(Photo via Tetra Images/Getty Images)

April 18, 2016: Individual tax returns are due for the 2015 tax year

(Photo via Alamy)

April 18, 2016: Requests for an extension on filling out your taxes must be filed by this date

(Photo by Chris Fertnig via Getty Images)

April 18, 2016: Those who are self-employed or have first-quarter income that requires payment for quarterly estimated taxes must have them postmarked by this date

(Photo via Alamy)

April 18, 2016: This date is also the deadline to make a contribution to an IRA account for 2015

(Photo by Garry L., Shutterstock)

June 15, 2016: Those who are self-employed or have second-quarter income that requires payment for quarterly estimated taxes must have them postmarked by this date

(Photo via Shutterstock)

September 15, 2016: Those who are self-employed or have second-quarter income that requires payment for quarterly estimated taxes must have them postmarked by this date

(Photo via Shutterstock)

October 17, 2016: 2015 tax returns that received an extension are due by this date

(Photo by Juan Camilo Bernal via Getty Images)

October 17, 2016: Today is the last chance to recharacterize a traditional IRA that was converted to a Roth IRA during 2015

(Photo via Getty Images)

January 15, 2017: Those who are self-employed or have fourth-quarter income that requires payment for quarterly estimated taxes must have them postmarked by this date

(Photo by Pascal Broze via Getty Images)

HIDE CAPTION
SHOW CAPTION
of
SEE ALL
BACK TO SLIDE


If paying tolls with cash, request a receipt. If paying tolls with an E-ZPass, provide a copy of your monthly statement to the bookkeeper. Parking expenses, depending on where you live, can be expensive. Parking can be paid with cash or credit cards in most instances. Even parking meters in some locations will accept a credit card. If parking on business, pay with a business credit card or request a receipt if paying with cash. If paying into a meter that only takes cash and provides no receipt, create some type of voucher system for recording this cash payment.

Many business owners put vehicle expenses way down on their list of things demanding their valuable time. But I say this time in tracking is time well spent. You will be surprised how a little time now can save you hundreds or thousands of dollars at tax time.

Once you track these expenses, you can handle them in a few different ways as the owner. The expenses can be booked as owner contributions to the business, or the owner can set up a system in writing to be reimbursed for these expenses.

Reimbursement can be handled as the expenses occur, monthly, or even annually. Remember, diligent tracking will save you dollars.

More from Inc.com
Elon Musk teases his next big idea

Should I Include a Dependent's Income on My Tax Return?

It may be easier and less expensive to include dependents' income on your tax return rather than have them file their own return—in certain circumstances.

Read More

Brought to you by TurboTax.com

Great Ways to Get Charitable Tax Deductions

Generally, when you give money to a charity, you can use the amount of that donation as an itemized deduction on your tax return. However, not all charities qualify as tax-deductible organizations. While there are many types of charities, they must all meet certain criteria to be classified by the IRS as tax-deductible organizations. There are legitimate tax-deductible organizations in many popular categories, such as those listed below.

Read More

Brought to you by TurboTax.com

Tax Tips After January 1, 2019

TurboTax gives you ten tax saving tips for the new year. Find strategies to lower taxes, save money when preparing your tax return, and avoid tax penalties.

Read More

Brought to you by TurboTax.com

Should You and Your Spouse File Taxes Jointly or Separately?

Married couples have the option to file jointly or separately on their federal income tax returns. The IRS strongly encourages most couples to file joint tax returns by extending several tax breaks to those who file together. In the vast majority of cases, it's best for married couples to file jointly, but there may be a few instances when it's better to submit separate returns.

Read More

Brought to you by TurboTax.com
Read Full Story