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Taxpayers should also retain receipts, invoices and other documentation to show cost and establish the identity of the vehicle for which the expense was incurred. For depreciation purposes they need to show the original cost of the vehicle and any improvements as well as the date it was placed in service.
How can you create a document to substantiate a mileage deduction? In short, you have to keep a mileage log that demonstrates the following: The distance traveled: the number of miles driven for each work trip. The date and time of each trip. The location: each business trips final destination.
As the name suggests, the actual expenses method requires you to add up all the money actually spent in the operation of your vehicle. You then multiply this figure by the percentage of the vehicles business use.
Actual Car or Vehicle Expenses You Can Deduct Qualified expenses for this purpose include gasoline, oil, tires, repairs, insurance, tolls, parking, garage fees, registration fees, lease payments, and depreciation licenses. Report these expenses accurately to avoid an IRS tax audit.
You generally must have documentary evidence, such as receipts, canceled checks, or bills, to support your expenses. Additional evidence is required for travel, entertainment, gifts, and auto expenses.
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You should use this worksheet if youre claiming actual expenses or the standard mileage rate. Once you enter in the information for the vehicle, ProSeries compares what gives a better deduction for the tax return and gives you the larger deduction.
As the name suggests, the actual expenses method requires you to add up all the money actually spent in the operation of your vehicle. You then multiply this figure by the percentage of the vehicles business use.
The necessary documents depend on which method you use. If you use the standard mileage deduction method, you will need your mileage logbook. If you are using your actual expenses, you will need receipts showing your expenses.

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