Finance expert Mike Periu on best practices to Deduct Business Use of Your Vehicle
Many small-business owners use their personal vehicles for business use. The expenses related to this use are a legitimate business expense and can be deducted on your income taxes. The IRS does, however, require proper documentation and failure to provide it could mean a denial of the deduction in an audit. They require “contemporaneous documentation” relating to expenses and mileage which basically means written evidence collected in real time. In a tax audit, the IRS auditor may accept reconstructed documentation but they are under no obligation to do so.
The IRS offers several methods to determine the amount to deduct, but in every case requires that you track the mileage of your vehicle during the year. Obtain an odometer reading at the beginning and at the end of the year to calculate mileage. (I do this by taking my car in for an oil change or other maintenance at the beginning and at the end of the year because dealerships record odometer readings when you take in your vehicle.)
A little about Mike Periu
Periu founded Proximo, LLC nearly 15 years ago. The company provides small business education and training services with an emphasis on finance and technology.
Periu teaches empowerment through entrepreneurship and economic opportunity. He regularly appears on television and radio talking about these subjects.
Periu also writes for leading blogs about finance. These include: American Express OpenForum, Yahoo! Finanzas and the Huffington Post.
Periu studied Finance and International Business at Georgetown University. He is a Board member at the Council for Economic Education.
