Tax Tribe

Traveling for business is exciting, even more so when you realize that many of those expenses may qualify as legal tax deductions, allowing you to keep more money in your pocket! But before we pack our bags and start jet-setting into the sunset, let's explore the difference between everyday business driving and business travel, what constitutes your tax home, and which expenses you may be entitled to. What’s the difference Between Car and Truck Expenses and Travel Expenses? The Car and Truck Expense Deduction generally covers the costs of using your vehicle for everyday business activities, like running business errands, visiting clients, or driving between business locations. The Travel Expense Deduction, on the other hand, applies to qualifying expenses incurred when you travel away from your regular tax home for business purposes. To qualify, your trip must last substantially longer than an ordinary workday and require you to stop for sleep or rest to properly perform your dutie...

The Car and Truck Expense Deduction can be an exciting and useful deduction for micro-business owners. But it also comes with some pretty stringent substantiation requirements. Records You’ll Need Under Either Method For either method, you need a contemporaneous mileage log . Contemporaneous simply means you’re recording the information at or near the time the trip occurs , rather than trying to reconstruct your travels months or years later. Your mileage log should establish several important pieces of information: The date of the trip Where you went The business purpose of the trip The number of business miles driven And while the mileage log is your primary record, I also recommend keeping documentation that further supports the trip. Let’s Look at a Real-World Example Imagine you’re a podcaster, and you agree to guest co-host another podcast as a way to bring more visibility to your own show. You and the other host confirm that you’ll record the episode at t...

 The car and truck expense deduction allows business owners to deduct certain costs associated with operating a vehicle for business purposes. What Constitutes a Business Purpose? Business purposes can include activities such as: Getting from one workplace to another Visiting clients or customers Going to a business meeting away from your regular workplace While it may be exciting to think about all the trips that could potentially qualify for this deduction, it’s important to distinguish business transportation from commuting . Generally, driving between your home and your regular place of business is considered commuting, which is personal travel and does not constitute business transportation. However, once you’ve determined that the trip has a legitimate business purpose, here’s the juicy part: there are two methods for calculating this deduction: the standard mileage rate or actual expenses . The Standard Mileage Rate The standard mileage rate allows you to deduct a flat a...

Every business owner knows that you need to spend money to make money, but spending money is only the beginning. You also need to know when the expense can be deducted, whether it actually qualifies as a business expense, and how it should be categorized for tax purposes . In our last three articles, we talked about why recordkeeping matters, what records you should keep, and how long you should keep them. Now, we’re going to build on that foundation by looking at the expenses those records support. We’ll cover: When expenses are deducted under the cash versus the accrual method What makes an expense ordinary and necessary How to handle expenses that are partly business and partly personal Capital expenses Cost of Goods Sold, or COGS If the terms capital expenses and Cost of Goods Sold terrify you, don’t panic. We’re about to dispel some of the mystery behind these categories so you can take advantage of all the legal deductions you’re entitled to and keep more money in your pocket. So...