Tax Tip Tuesdays: Automobile Expenses and Deductions for Writers

With taxes about a month away, many writers are confused as to what expenses are tax deductible. When it comes to your automobile, here are some guidelines.

Automobile Expenses for Writers

Driving to the local office store to purchase writing supplies can generate a tax deduction with proper documentation. This is what you need to know.

The miles that you drive which are related to the operation of your business, or the actual expenses required to maintain your automobile can generate tax deductions. This is one of the most overlooked tax deductions for writers.

You will need to choose one method based on the options below.

Method 1—An IRS Adjusted Mileage Allowance  – This allows you to deduct an annually adjusted dollar amount (55.5 cents for 2011) based on each mile traveled for business.

Method 2—The Actual Expense Deduction – This method requires you to keep track of all costs related to the operation of this vehicle. You can include in this amount gasoline, oil, repairs, license, insurance, depreciation, parking fees, and tolls.

Both methods require written documentation to substantiate the claim including beginning odometer reading, ending odometer reading, total miles driven, your starting location, your destination, as well as the purpose for the trip. The mileage not documented can be considered personal.

© Brigitte A. Thompson, Datamaster Accounting Services, LLC

The information provided is intended to be general and based on the Federal Tax laws of the United States. As such, it is subject to change. This information is not intended to be used as a substitute for financial or legal advice.  Be sure to consult your tax advisor on all tax matters.