Tax Tip of the Week

A dear friend recently gave us a book (Sandy Botkin's Lower Your Taxes -- Bit Time!) on how to take advantage of many pro-small business tax rules and regulations here in the U.S. Mr. Botkin's book is thorough and well written, and might be worth checking out from your local library (we have no affiliation with the author whatsoever).

To save you the time or the trouble, here's our highlight from said book:
  • If your home is your main place of business (which it is for virtually all the freelancers we know), then all your mileage for business is tax-deductible starting from your house. This does not apply to part-time freelancers, who can ergo not deduct a trip to the bank that's on the way to their non-translation employment. The 2008 IRS reimbursement rate is $0.585 per business mile driven. For 2009, this rate will go down to $0.55. For five years, while working as an in-house translator for a company that reimbursed mileage, I did not take advantage of this; now I am kicking myself for not having done so. It sure adds up; every trip to the bank or the post office does. Be sure to write the miles down (you might want to keep a small notebook in your car for that purpose).
While trying to design a decent spreadsheet to keep this data and keep the IRS happy in case of an audit, I discovered that the book's author, in a shameless attempt at self-promotion, was selling a rudimentary spreadsheet that took me about five minutes to make. Feel free to e-mail me and I will send you my template.





2 comments:

Eve Bodeux said...

I used to claim those types of miles (errands for the business) and then I fell out of the habit (I always claim miles for business meetings and the like), so thanks for the reminder. As small business owners (yes, we are!) it is hard to always keep in mind the deductions we can take. Thanks!

Eve

Judy and Dagmar Jenner on December 10, 2008 at 3:50 PM said...

Happy to help, Eve! It all adds up. With that, I am off to Office Depot to buy a headset for my computer -- and I am keeping track of the mileage, of course.

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