Ugh: tax season; never an easy time for freelance photographers. While paying your taxes in full and on time makes you a better citizen, it does not mean you should leave money on the table. Chances are that you do.
Freelance photographers often drive their own car both for private and business. Many people know that business miles are tax-deductible – but few know how to do it properly. It’s definitely worth your time to learn the rules.
In the US, driving your car for business in 2015 gives you a deduction of 57.5 cents per qualifying mile. Driving 10,000 business miles means in $5,750 in tax deductions! This is not a small amount, and it’s even more generous than last year’s 56c per mile.
There are fairly complicated rules determining which drives are deductible and which aren’t. Commuting usually isn’t, while trips made to client sites generally are. The bottom line is that you have to keep a record of all your business drives. This is not easy, and a tax audit might result not only in denying your deductions, but paying a painful penalty.
While the IRS, in theory, should accept paper mileage logs, this is definitely not the best solution. Using a spreadsheet template is a better idea, but you still have to manually log your trips every day. (Yes, every day. Doing it in batches might result in denying your deductions.) The best mileage log system is the one you can forget about – and in the age of smartphones, you have many options.
There are a few things to consider: will the app you’re considering make it easy to categorize personal and business drives; will it detect your trips automatically; and are the data export options are good enough to make your accountant happy. MileWiz, currently available for iPhone and iPad, is one of the most feature-rich apps on the market that’s well worth your time to take a look. The app is free to download, and logging the first 20 drives per month has no additional cost. The unlimited plans are very reasonably priced ($4.99 per month or $49.99 per year) considering MileWiz is an app that actually puts money back into your pocket. A subscription pays off for an entire year in just 87 qualifying miles.
MileWiz has a special offer for readers of TheLawTog. Once you have downloaded the app, open the left menu, select Settings, Driving Plan, and enter the VIP code 20DRIVESBLAST. This will give you an extra 20 free drives, so 40 per month in total.
Learn more about MileWiz at http://milewiz.com