Tax Tips: Road Warrior Deductions

If you use your car for business, and are not fully reimbursed by your employer, you can claim a deduction as an employee business expense on Schedule A.

The simplest way to deduct the business use of your automobile is by using the standard mileage rate. For 2009, that rate for business travel is 55 cents a mile. In addition to the standard mileage allowance, you can also deduct business-related parking fees and tolls.

You can also choose to deduct the business use percentage of the total cost of maintaining your car, including depreciation. If you drive 6,000 miles for business and your total mileage for the year is 10,000, your business use percentage is 60%

To claim the standard mileage allowance you must do so in the first year the car is “placed in service” — the year you purchased the car, or the first year you used the car for business. If you claim the standard mileage rate in the first year you can switch to actual expenses in a later year — but if you claim actual expenses in the first year you may not be able to change over to the standard mileage allowance in later years.

It’s a good idea to keep a car maintenance log to record all related expenses for the year — gas, oil changes, tune-ups, repairs, car washes, etc. — so you will have the information available to make an informed decision on which method will save you most. — Robert D. Flasch

Consumerist has teamed up with MainStreet.com to bring you tax tips every day between now and April 15th. This frees up Tax Cat to do more important things — like trying to claim hairball meds and catnip as business expenses.

Looking for more deductions? You’ll find tons at MainStreet.com.

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