If you are a 1099 employee, self employed or W2 employee that travels a lot, a big above the line write off on your tax returns are your mileage and/or automobile expenses. One thing that is highly scrutinized in the IRS Audit Process are these expenses when claimed.
In order to prepare for an audit or the chances of being audited, one of the best things that can be done is the tracking and computing of these expenses. First you need to understand the rules associated with these expenses and what you can and can not claim as an expense.
First if your main office is a home office than you can claim all miles used for business purpose. You can keep track of the mileage used by having a log book and keeping the miles used daily or weekly. Sometimes the IRS will take the year beginning mileage and the year ending mileage. If this is done you will have to take the total mileage and times it by the percentage the car is used for business purposes.
Second, if you have an office but travel to different work places than you must not count the travel from your home to your office. If you start the day off by heading to a work site other than your main office, you have to subtract the round trip from your home to your main office. Also if you have two jobs you can deduct the mileage that you travel to get to your second place of employment.
If you don't have a main office and for example are a sales rep that you solely travel from customer to customer you can deduct all travel expenses.
It is important to understand these rules when you are using this deduction. Also please remember that you have to keep good logs. In an audit that can mean all from getting all your deduction or none of your deductions to count, as it is up to the IRS Auditor.
Additional questions please call 877-298-0890 or visit www.mytaxrep.com
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