Topic: Taxes & Accounting
Time Investment: 3 Minutes
Suggested Product: BizRevamp®
Trying to keep with receipts, tax deductions and money management is a daunting and overwhelming task. The best part of running a photography business in this digital age is the access to information (like this site) that can guide you on how to make the most out of your business funds, as well as tools that at our fingers tips to do the work for us. An extremely overlooked tax deduction that is easily manageable for photographers is mileage. Did you know that every 1,000 miles is worth a $575 tax deduction (2015 IRS Rates)?!
How do I use this tax deduction?
If you are using your vehicle for qualified business purposes (as well as medical or charitable), you can deduct your vehicle expenses. Anytime you are going to run business errands, trips to meeting with clients and vendors, travel to and from airport for travel, and travel between your places of business, you can deduct mileage.
This is awesome news, but what is even better is that mileage deductions really do have an impact on your tax liability.
If you own or lease your vehicle, you can either deduct the standard rate per mile driven or the actual expenses spent on the business travel.
If you lease, and you’re trying to choose between standard rate per mile or actual expenses – you need to consider this: if you lease your vehicle and opt for the standard mileage rates, then you must continue using the standard mileage rates for the remainder of your vehicle’s lease.
For more information on the IRS Standard Mileage Rates, I have linked the site for you. They keep this updated so make sure you do a routine check of the rates.
What is the best way to track my mileage?
#1 Every time you get in the car start with your log or application
#2 Include the information with your client files and/or a document to reference at tax time
#3 Store information in the cloud and at least two other areas (the back-up rule of threes!)
But to be honest, I have tried paid apps, mileage logs, taking pictures of odometer and uploading – but none of them were as easy as the free Everlance App. I absolutely dig this application, and did I mention it’s free?! Free is always great. After testing it out, however, I totally would throw down money on this application to keep me sane and organized.
Everlance lets you automatically track all your miles and other business related expenses. The more expenses you account for, the less you have to pay in taxes.
Anything that is going to save me time, save me money and protect me against the IRS is two-thumbs up.
One of my favorite functions, that sets the application apart from others, is that you can categorize mileage. This is one thing that was great because it means I can also do a self-evaluation of how much mileage and time I was putting in to meet clients or vendors. I can take this data for tax deductions but also for evaluating whether I’m receiving a good return on time and money for these extra trips.
My next favorite function of the Everlance App is the automatic trip detection. The smart app detects your trips and automatically saves it in the cloud so you never have to worry about where you left your receipts again!
Gone are the days of those travel logs or trying to mapquest at tax time. I am digging Everlance and look forward to my mileage deduction this year!