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Salvage an extra deduction for business travel

by on
in Small Business Tax,Small Business Tax Deduction Strategies

Suppose you damage the car you normally use for business in an accident. The car will be in the shop for several weeks for repairs. Since you had a business trip planned for the end of the month, you’ll probably postpone or cancel the meeting.

Strategy: Go ahead with your original plans. Just use one of your family’s other vehicles for the business travel. Even though it’s not your regular business car, you can still deduct your business-related expenses.

Example: Let’s say your teenage daughter will be away at summer camp, so she won’t need her car. You drive a total of 1,000 business miles in her car while your car is in the shop. Plus, you pay $150 in tolls and parking fees during your business travels.

If you use the standard mileage rate for this “second” car, you can deduct a total of $635 for 2007 (48.5 cents per mile, plus $150 in tolls and parking fees), in addition to your regular business car write-offs.

It doesn’t matter that the car isn’t used for business the rest of the year. Alternatively, you may deduct the actual expenses attributable to the business use of your daughter’s car, although this will involve more record-keeping.

Note that you can claim a relatively small depreciation deduction for your daughter’s car if you change the actual expense method.

Tip: No rule prohibits deducting expenses for more than one business vehicle so long as its use is legit.

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