Does Having A Business Sign On My Vehicle Allow Me To Deduct 100% Of The Mileage?
The tax deduction for business mileage is a hotly debated topic. One of the most common questions that we get at tax time from clients in the construction industry is "Can I deduct 100% of my mileage if I have a business sign on my vehicle?" There are some very specific rules around what qualifies as tax deductible miles and who can claim them; not everyone has the same rights when it comes to tax deductions for their mileage driven in their personal vehicles.
Here are some answers to common questions relating to the business mileage tax deduction:
What are Tax Deductible Miles? A mile driven while carrying out duties related to your trade or business may be tax deductible. This includes driving to meet with customers, taking inventory, or delivering goods/services.
Who Can Claim These? Businesses can only deduct tax deductible miles if they are owned by the business or an employee of that company. A vehicle owner (whether a sole proprietor, partnership, LLC, corporation) cannot claim tax deductions for his/her personal mileage in their own car unless it is used exclusively for business purposes.
What Does This Mean? The purpose of the trip is important when determining tax deductions. A business owner can deduct the miles driven to a client meeting, but not when running errands for personal reasons.
Business Signs or Not? If you have a business sign on your vehicle, this will allow you to claim the full mileage deduction on all trips that are for business use only.
In conclusion, it matters if the trip is for personal or business use, even if the tax payer has a business sign on their vehicle. You do need to maintain accurate logs for every trip taken in a vehicle that is used for your business. This will help you to determine tax deductions and will also be used as proof during an IRS audit should one happen to occur.
If you want to make your business thrive and be profitable, then let Spectral Accounting help! Schedule a discovery call today.