Running a business can take a lot of time and energy. While you may be doing something that is your passion, there is still a lot of time and energy that you will need to take care of in the process of producing and creating your business. If you are not ready for all of the hard work, starting your own business may not be the best option for you to choose.
But if you are ready to start working for yourself, making more money, and doing something that you really enjoy, you will love running your business. Even if you are ready to run a business, you will need to be careful with the amount of expenses that you are dealing with through the year. A business can be expensive and in between running everything and purchasing the items that you need to keep the business up and running.
The best way to ensure that you are getting the most out of your business is to learn how to save money wherever you can. One way to do this is to work with your tax professional and figure out some of the best business deductions that are available. One of the ones that you can choose is the business vehicle deduction. Whether you are using your own vehicle or have one that is specifically for the business, you could get a deduction on the use of your vehicle. If you would like to get this deduction, or find out about some of the other deductions that are available for your business, make sure to contact your tax professional as soon as possible.
Simple Deduction
The simple deduction is the option that most business owners will go with. It is simple and doesn’t require as much record keeping or calculations at the end of the year. All you need to keep track of is the mileage that you went through on the vehicle, just the miles for business use, and then plug this in on your tax return.
You will times this by the official mileage cost that is set up by the IRS, this number changes each year, and this is the amount that you can use. The number will vary because it depends on the inflation rate and it is meant to help cover your mileage as well as some basic maintenance fees. This is an easy number that you and your tax professional will be able to work on together and you could get a good refund back from.
Complex Deduction
Another option that you can choose during tax season is the complex deduction. This one is going to take a bit more time to complete, but you will often be able to save more money on your tax return at the end of the year. You will need to keep really good records through the year to get this deduction, but it can help you out quite a bit.
For this deduction, you will need to first figure out how much of the time you are using the vehicle for business and how much you are using for personal use. Then you need to bring out all of your receipts for mileage and how much you spent for maintenance and repair of the vehicle. You should be able to get all of this information from the records that you are keeping through the year and can use these on your tax return.
From this information, you will be able to figure out exactly how much you spent on using your vehicle for business purposes and you can deduct this amount at the end of the year. Most people will not choose to do this option because it takes more time and you have to keep some good records through the year. But with some good record keeping, it can really save you a ton of money.
Choosing the One For You
Choosing the option that is going to work for your business is all up to you. Some people like to keep things easy and will just go with the simple deduction since this can save them quite a bit of money and often comes close to the complex deduction. If you would like to keep your taxes simple through the year, the simple deduction for business vehicle use may be the best option. On the other hand, some people like to see just how much they are able to save and are good at keeping track of all the receipts and will rather go with the complex deduction, even if it may take them a bit more time.
You can work with your tax professional to help you determine which of these options the best is for you. They can even go through most options to help you figure it out and which one is going to be the best.
If you are ready to get started on your business taxes for the year and want to save as much money as possible, make sure to find a local tax professional who can work through the tax return with you. Whether your business is big or small, the tax professional will be able to ensure that you are getting the best deductions and money savings possible this tax season. Contact our offices to find the right tax professional to help out with all of your needs.
Joseph J. Gormley CPA