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Many clients use their cars for both business and personal use. The IRS code allows taxpayers to take a tax deduction in one of two ways.
2. Depreciate the Car
a. the mileage for each business use of the car \\ b. total mileage for all use of the car during the year \\ c. the date of each business use \\ d. the business purpose for the use.
The professor in the recent case submitted to the tax court a travel log consisting of a collection of preprinted forms which he had filled in; however, he had completed them after he was already being audited by the IRS, and he had no other support.
Please keep in mind that if you business has a home office then the mileage to and from the client will be business with no deduction for commuting.
Conclusion: It is fair to state that many taxpayers are not recording and keeping the documentation they need and run a significant risk of no deduction being allowed for legitimate business use of their car. Remember that the key to most tax planning opportunities is having good records to prove your case.
Please feel free to forward this email to business associates who might benefit from this information.