Starting July 1st, 2011, your business miles are going to be a lot more valuable. For every mile you drive, the IRS will let you write off 55.5 cents, up from 51 cents for January 1st through June 30th. What does this mean for you?
- Capture every deductible mile! Yes, that means keeping a mileage log and using it regularly, but think about all those trips that you might be missing. Running deposits in to the bank, dropping off mail at the post office, even making an office supply run. Track all these trips in your mileage log and you’ll be adding $55.50 of deductible business expenses to your books for every 100 miles you drive.
- Speaking of mileage logs, be very careful to track mileage for January 1st through June 30th separately from mileage for July 1st and beyond. The bump in the deductible mileage rate is only applicable to miles driven on July 1st and later.
- While you’re tracking your mileage, be sure to capture miles driven for charitable purposes. These might include miles driven to PTA meetings or other nonprofit groups, miles driven to donate used household goods, or even miles driven to volunteer for a benefit walk or a Habitat for Humanity event. For example, if you drive to your church to provide volunteer office work once every week, you can deduct the round-trip mileage at the “Charitable Contribution” rate of 14 cents per mile.
The IRS stated that the increased mileage rate was a direct result of the increased gas prices that we’ve experience this spring and summer.
Too hip for a paper mileage log? The App Store on iTunes lists several mileage apps, including MileBug, MileTracker and Trip Cubby, all for less than $5.
Deb Howard Greenleaf, EA, CEO and Principal, of Greenleaf Accounting Services provides virtual accounting and bookkeeping services and specializes in financial management to consultants, coaches, solo professionals, and other small business owners across the US. Deb is an Enrolled Agent (EA)—an IRS-licensed tax professional—and specializes in small businesses and entrepreneurs filing Schedule C or as an LLC. As an Advanced Certified QuickBooks ProAdvisor, Deb spends her day in QuickBooks Online and specializes in providing QBO support.