If you use a vehicle for conducting business, you can deduct certain automobile costs from your tax bill. This is true even if you use the vehicle for personal and business needs.

Automobile Deductions

The powers that be have historically written sections into the tax code promoting business activities. One of the traditional write-offs has always been the expenses associated with using a vehicle for business purposes.

The simplest automobile write-off situation is one in which a vehicle is used entirely for business. For example, if you have a van used for a delivery service and nothing personal, all expenses associated with the van can be written off. This is known as the exclusive use situation. For many small businesses, however, a vehicle will be used for both personal and business reasons.

Where you use a vehicle for both personal and business reasons, you can only deduct expenses associated with the business use. Keep in mind that driving to and from work is not considered business mileage, while driving from an office to meet a client is considered business mileage.

There are two methods for determining deductible automobile tax expenses. The first is a simple calculation known as the standard mileage deduction. The second is the actual expenses method. You can choose whichever deduction provides you with the biggest deduction unless you lease the car. With a lease, you must use the standard mileage deduction.

The standard mileage rate deduction is a calculation wherein you multiply your total business mileage for the year by a figure provided by the IRS. For the first eight months of 2005, the figure provided by the IRS is 40.5 cents per mile. For the last four months of 2005, the figure has been bumped up to 48.5 cents to reflect high gas prices.

The actual cost expense option is exactly what it sounds like. It is the actual cost associated with using the vehicle for tax purposes for a particular tax year. Automobile expenses will include gas, tires, repairs, oil changes, registration costs, licensing, insurance and so on. In many cases, the actual expense deduction will end up being larger than the standard mileage deduction.

Regardless of the method you choose, you must document the expenses you hope to write off on your vehicle. This means keeping a mileage book and receipts of anything you intend to deduct.

Richard A. Chapo is with BusinessTaxRecovery.com - providing information on taxes. Visit us to read more articles about tax deductions and our new tax help page.

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It may be too late for this tax year, but one of the best, legal and rewarding tax write-offs is starting a home business.

The IRS will give you 3 out of 5 years to make a profit before they start asking you if your business venture is a hobby. But until then, you can put your best foot forward, and who knows, you may be a complete success story within a short period of time. The really good news is, every dime spent on starting a new home business is tax deductible. But wait, don’t quit your day job yet.

Put forth a real effort and find a business that you will be happy with. Do what you love and eventually, you can expect profits if your small company is operated efficiently. Don’t sweat the small stuff, in the beginning, however, a business license might be in order and a resell license, depending on what type of business you start.

Expenditures

Pay for as many expenditures with a check or by credit card, so that you generate a traceable ledger of expenses. Try not to worry about letting up a bookkeeping system until after you start to make money - then you will have a reason to concern yourself with an accounting system.

Be sure to save ALL of your receipts and log in all the miles you drive for business. It is necessary to log down the beginning mileage, date and destination. That way, should the IRS have question, you will have answers.

Business Deductions

For next year, you will file your business expenses and income using Schedule C, Profit or Loss From Business (Sole Proprietorship) If you have a Partnership, Joint Venture, etc. you will need to use Form 1065

Your basic deductions can include cost of advertising, marketing, auto expenses, commission and fees that you pay to others, contract labor, insurance for the business and fees for legal and professional services.

You will also be able to deduct office expenses, repairs and maintenance, supplies, taxes and licenses, travel, meals and entertainment and wages to employees. Your cell phone bill more then likely will be deductible, your ISP cost, cost for the design and upkeep of your web site, learning materials, training cost and other cost associated with your business.

Additional Deductions

Should you make a profit, then you can elect to take deduction for - Expenses for business use of your home - Form 8829. (Be sure to speak with your tax professional before using your home as a business expense write-off)

Form 8829 will ask you for the total square footage of your home and how many square feet are used for business. The tax software will then compute the percentage use for business and will calculate the total cost for the upkeep of your home accordingly. (It is wise to have your tax professional help you with these forms)

If your small and new business generates a lost - this will go on your Form 1040, and will show up as a lost (negative number) This lost lowers the amount of monies that “you” will be taxed on.

And who knows, there might be a large profit, if it looks like you are going to make a profit for the year, contact your tax professional and let them know. They can generate a payment coupon where you can pay self-employment taxes to help eliminate tax pains (liability) for the coming tax year. This is a problem, you want to have. It’s a good problem.

Have fun with your new venture, keep good records, pay Uncle Sam his fair share and increase your income and your write-offs.

Cassandra Ingraham is a Tax Accountant and Instructor for Basic Tax Classes in the San Francisco Bay Area. During the balance of the year she can be found at http://www.taxeswilltravel.com providing Formal Introductions to Lenders for Accounts Receivable Funding (Factoring) and Purchase Order Funding.

For online back taxes or shoe box accounting, visit http://www.taxeswilltravel.com

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If you own a home based business, or even a small business, here is a list of some of the small business tax write offs you should be aware of. The tax laws are setup in such a way as to help you with starting a business. So we should make sure we are writing off everything we are entitled to.

1. Home Office: This constitutes a room, where your office equipment is located, which only has one entrance and exit. The rule of thumb is you should be able to shut a door, and not need to go I there except to work in the office. The way the deduction works, is take the square footage of the office, and divide by the square footage of the house. This gives you are percentage, like 15%. Then you can take 15% from the mortgage (or rent), home owners insurance, electric, gas, water, and trash bills, and write this off to the business.
2. Business supplies: This can include computers, laptops, PDA’s, printers, office supplies, business cards, stamps, postage, and anything basically used to maintain the office.
3. Internet connection: You will need, or have , one of these already. This is a legal business write off, so make use of it. I would personally upgrade to cable internet if you have not done so already.
4. Business phone: In this scenario, you must have a 2nd line in order to deduct it. I would also recommend going with VOIP service. For a fee of less than $30 per month, you can have everything unlimited.
5. Meals and Entertainment: If you go out to eat, or for a coffee, and discuss the business, you can write this off. Just write on the top of the receipt who the meeting was with, and keep the receipt.
6. Mileage: Driving anywhere for a business purpose allows you to write off the miles it took you to get from point A to point B, and back. Get a mileage book to help keep track of this.
7. Coffees and Sodas: If you would normally buy and drink these at an office, you can also deduct the same things even if you are at home. Just save the receipts.

There is a brief list of deductions you can take towards your business. Just remember, the tax laws are written in our favor, so make use of these small business tax write offs.

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Most people just go to the local income tax preparing office & blindly hand over their tax information to the accountants for a basic price to save money.

What they don’t know is that if they only paid the extra fee to find a good chartered accountant that they could save a lot of money & at the same time get a bigger refund.

I am talking about writing off thousands of dollars not only hundreds.

You can write off a percentage of anything that cost you to make money such as:

1. Transportation expenses (car, fuel, repairs, rentals etc).

2. Office expenses (papers, advertising, staples, books etc).

3. Furniture (filing cabinets, desks, tables etc).

4. Computers, phones, cell phones & other electronic gadgets.

5. Special tools or devices needed.

6. Special equipment.

7. Apparel or uniforms.

8. Food or entertainment.

This list can go on & on if you are a business owner that has spent any expense to incur an income. If you are an employee then you may not be able to write off anything unless let’s say you own a home based business. An employee that owns a home based business can then write off expenses but it would be best to consult a professional accountant before attempting to write off anything.

Here is a list of whack things that some people have written off in the past:

1. Breast implants.

2. Animal depreciation.

3. Cat food.

4. Body oil.

5. Clarinet lessons.

6. Dentures.

7. Dentures.

This is what I call really being creative (or weird) with tax write offs. Take this seriously folks. Find out what you can legally write off by consulting a professional accountant. The constant hike in fuel prices will not get any better. It is your responsibility to keep most of your hard earned dollars in your house hold. This is taking better care of your family.

If you don’t take tax write off’s seriously or think that you can’t write anything off because you are an employee then find a good home based business to make you entitled.

Why should you leave money on the table?

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There are many people who are truly living a life BEYOND Limits right now with this Opportunity. There are people from both white & blue collar backgrounds here. We have EX: Doctors, Police Officers, Truckers, Franchise Owners, Corporate Executives, Real Estate Agents, Computer Techs, Mechanics, Butchers, Cooks, Waiters, Car Salesmen, Retail Workers, Hotel Managers……The list goes on & on.

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Rory Singh is a Home Business Development Coach and Professional Marketing Consultant. To learn how to set up & run your own online business successfully & efficiently visit: http://www.networkopportunities.net

This industry has created more millionaires than any other career in the US & Canada.

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A tax write off is the same thing as a tax deduction, and if you don’t know what expenses are legitimate deductions on your tax return, you won’t know what you can legitimately write off either. In the case of tax write offs, what you don’t know can be very painful indeed.

Tax write offs are taken by business owners and are items which in normal circumstances might not be allowable deductions but become so when the situation of a business changes.

Because the amount of taxes a business pays are based on the income it gets, a debt which not been paid, or receivables which never show up can be categorized as bad debts and written off. You have to declare any bad debts but do not have to include them when you calculate your income for your annual return.

Loans

If you have loaned your personal funds to help support your business, you can write them off, even though you may have referred to them as income in order to raise the net worth of your business for borrowing purposes. But they remains loans, not income, and cannot be subjected to tax. And if you’ve taken a business loan from a third party lender, you may be able to get a tax write off on the interest payments.

Pension Plans

If your business has less than a hundred employees and you are providing them with pension benefits, you can get a tax credit and it will be deducted not from your business’ gross income, but directly from the amount of money you owe in taxes. This may not be called a tax write off in the IRS literature, but for all intents and purposes it is.

The government is concerned that Social Security will not be adequate to fund the retirements of millions of Americans, so it does what it can to encourage businesses to look out for their employees. You’ll help your workers, and the tax credit/tax write off will help your business’ bottom line.

You can also take a tax write off on any state and municipal taxes which your business pays. This write off includes both state and municipal income taxes and state and municipal sales taxes, deducting them from your total taxable income.

Travel Expenses

And while the IRS regulations are somewhat vague on the matter, you can claim a tax write off on trips during which you spend more time devoted to business than to pleasure. You can keep records of your transportation costs, like cab fare, air fare, and rental car expenses. If you drive your own vehicle, you can take a write off for the mileage.

You can also find more info on File Tax Help and Tax Accountant. filetaxhelp.com is a comprehensive resource to get information about Tax.

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