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You may either receive business travel reimbursements from your employer tax-free, or deduct business travel on your tax return (to the extent that all of your un-reimbursed employee expenses exceed the standard deduction for you filing status).
There are 2 different methods to account for vehicle expenses – actual expenses or mileage rate. To use the actual method, you report all actual expenses plus depreciation, and take the business percentage (based on percentage of business mileage to total mileage). For example, if you drove a total of 20,000 miles in a year, of which 10,000 miles were for business, you would have a 50% business deduction for that year. If the total out of pocket cost for operating the vehicle was $5,000 (gas, oil, maintenance, insurance, license, depreciation, etc.), you would have a $2,500 business deduction. Depreciation is based on the cost of the vehicle and can be accomplished by your tax preparer. However, you must track all other expenses by keeping all receipts.
The mileage deduction is calculated by multiplying actual business mileage by the current mileage reimbursement rate, currently 34 _ cents per mile. The mileage rate is calculated to pay the entire expense of operating a vehicle (including maintenance and depreciation), so when taken, no other vehicle expense is deductible. At $3,450 per 10,000 miles, the mileage rate is usually the better deduction, and does not require keeping receipts.
For either method, you must report total miles driven for the vehicle, business miles, commuti
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