Working with the IRS mileage and vehicle deduction rules.

Vehicle Rules

You have no choice if you want to deduct the business use of vehicles.

You are face-to-face with the IRS’s business and personal mileage rules. And you face the same mileage rules regardless of how you operate your business (as a corporation, proprietorship, or partnership).

You find the basic mileage rules in Revenue Ruling 99-7, which pretty much controls whether your trip from home to a location is going to be a business or personal trip.

As a business owner, you want maximum business mileage so as to create the most deductions for you whether you drive one, two, or three vehicles for business.

But you want only legitimate miles. You don’t want to put the IRS in a position where it has to deny your business mileage because you violated the mileage rules.

Mileage violations can make you look like a tax cheat. If the IRS thinks you cheat on your taxes, it is going to open you up for a full-blown examination.

Commuting to work gives you nothing but pain, let’s eliminate the pain.

The IRS gives you two possible strategies for turning otherwise personal mileage into business mileage:

  1. Going to a temporary work location
  2. Establishing an office in the home as a principal office

The temporary work location strategy contains some real unknowns, such as:

  • What is a temporary work location?
  • When is work at that location performed for one year or less?

The two possible unknowns above can make it difficult or impossible to use your facts and circumstances to produce your desired business-mileage results.

The easy solution is the office in the home as a principal office.

The first reason this type of home office is an easy solution is that the rules are crystal clear, making compliance easy. The second reason is that with this office you know that all trips from home for this trade or business are business trips, including the trip from your home to your regular office outside the home.

Many business owners  have a genuine opportunity to increase their business mileage and thereby add to their  bottom line. Let’s set up a time to discuss some strategies that can work for you.