Deadline for Business-Vehicle-Use Tax Deductions
Sunday, Oct. 3 is the Deadline to Qualify for 2010 Tax Deduction for Vehicle Business Use.
Taxpayers who use their personal vehicles for business purposes in 2010, may claim 50-cents per business-mile tax deduction, but only if they keep proper records, according to Home Business Tax Savings, Inc. (HBTS), specialists in home-business tax law.
“If a home-based business owner drives 8,000 miles in 2010 for business purposes, that’s a $4,000 tax deduction,” says HTBS president Dr. Ronald R. Mueller. “If that taxpayer is in the 25 percent tax bracket, the deduction will add $1,000 to their Tax Refund.”
To document the deduction, the Tax Code says the taxpayer must maintain proper records for “a typical 90 consecutive day period.” [IRS Regulation 1.274-5T(c)(3)(ii)]
After Sunday, Oct. 3, there no longer will be 90 days remaining in 2010. Therefore, any taxpayer who has not begun a vehicle-use log by Oct. 3, will not qualify to use the IRS “90 day rule,” which can cost them $4,000 or more in lost tax deductions.
What constitutes ‘proper records’ for tax purposes? “Each time the driver starts the ignition – even if the trip will be for a non-business purpose – he or she must record four pieces of data — date, destination, primary purpose, and number of miles traveled,” Dr. Mueller says.
“Then what? First, you add up all business-miles for your 90 day period, and the IRS will accept that number as an accurate sampling of your business-use for the entire year. Since 90 days is 25 percent of a full year, the taxpayer may then multiply that number times four, and the IRS will let you to deduct that number of business miles for 2010,” according to Dr. Mueller.
The above example applies only to taxpayers who operated an active home-based business for the entire year of 2010. If the business was established during the year, the numbers would be prorated.
A free Vehicle Mileage Log and further details about this deduction, are available as free downloads at www.HomeBusinessTaxSavings.com
Ronald R. Mueller, MBA, Ph.D., is the author of “Home Business Tax Savings, Made Easy,” the only ‘plain English’ guide to home-business tax deductions approved by Congress, and now included in the Tax Code. For more information, visit http://www.HomeBusinessTaxSavings.com
News source: RushPRnews http://rushprnews.com/2010/09/26/deadline-looms-for-business-vehicle-use-tax-