Wondering how to maximize deductions for a car used for both business and personal purposes? Dr. Friday explains the two main methods: the mileage deduction and the actual expense method. She emphasizes that a mileage log is the cleanest way to manage these deductions, with the 2023 rate at 67 cents per mile. Keeping a detailed log, using tools like Mileage IQ, ensures proper documentation. Although the actual expense method, covering fuel, insurance, and depreciation, is an option, it can be more complex. Dr. Friday recommends tracking miles for simplicity. For guidance, reach out to her office.
Transcript:
G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.
So how can you deduct a car that you use for business but also for personal use? My opinion, the cleanest is a mileage log. Taking off per a mile, this year it’s what, 67 cents a mile for business use? Track it, document it, say who you met, what it’s for. Or you can take actual. Actual is the petrol, the insurance, the depreciation based on the percentage of use. I find that not to be as easy because it’s different uses and percentages every year. So taking the miles will be cleaner. Using something like Mileage IQ will give you the log. If you need help to understand that, call my office at 615-367-0819.
You can catch the Dr. Friday Call-In Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7. WTN.