Artisan Q&A
Dear Rex,
I’m an artist and I use my car for all kinds of business purposes. What can I “pay for” through my business towards travel, and what deductions should I be tracking for tax purposes?
–Wandering Artist
Dear Wandering,
The travel expense deduction gets extra scrutiny from the IRS because it’s so prone to being abused. Business use of a personal car even has special record keeping rules. If you own only one car, logic dictates that some of the miles you put on it in a year must be for personal reasons: your daily commute (if you’re an employee) and trips to the mall, grocery store, movie theatre, and the like aren’t eligible for deduction. So to be able to claim any auto-related expenses, you must keep track of how many of the miles you’ve driven were for business and how many were personal.
The most commonly accepted documentation is a written mileage log. Here’s the most painless way to use it. Stash the log and two pens (in case the first pen runs out) in your glove box or center console. On January 1, write down your mileage. Every time you finish a business drive, note the date, the number of miles driven, and the business-related purpose of the trip. Don’t worry about tracking your personal use miles; only track the business trips. On December 31, write down your mileage again. By subtracting your starting mileage from your ending miles, you’ll get total miles driven in the year. Add up the miles driven from each business trip and subtract that number from the total miles to get your personal miles driven.
By the way, the standard mileage rate for business driving dropped from 55¢ per mile to 50¢ per mile, effective January 1, 2010.