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Friday, February 12, 2010

Every Tax Deduction Helps

Watch Your Mileage Deductions

Taxpayers often miss important deductions, and one of them is the deduction for business mileage.

26 CFR 601.105: Rev. Proc. 2009-54 updates Rev. Proc. 2008-72, 2008-2 C.B. 1286, and provides optional standard mileage rates for taxpayers to use in computing the deductible costs of operating an automobile for business, charitable, medical, or moving expense purposes.

This revenue procedure also provides rules under which the amount of ordinary and necessary expenses of local travel or transportation away from home that are paid or incurred by an employee are deemed substantiated under § 1.274-5 of the Income Tax Regulations if a payor (an employer, its agent, or a third party) provides a mileage allowance under a reimbursement or other expense allowance arrangement. The substantiation methods described in this revenue procedure are not mandatory.

A taxpayer may use actual allowable expense amounts to substantiate expenses if the taxpayer maintains adequate records.

The attorneys at Shoffner & Associates are always available to help you make the most of your business opportunities.  Write to Freya Shoffner at -- anytime.

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