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Ease gas pain; start tallying actual car costs

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in Small Business Tax

With gasoline prices shooting through the roof, the IRS took the unusual step last month of increasing the standard mileage rate deduction for the final four months of the year.

The new 48.5-cents-per-business-mile (plus tolls and parking fees) rate applies to all business miles driven from Sept. 1 through Dec. 31, 2005, and that represents an 8-cent hike from the 40.5 cents-per-mile rate in effect during the first eight months of 2005.

Despite that sizable boost, however, you may find that the actual cost of driving your car for business amounts to much more than 48.5 cents per mile, perhaps even double.

Strategy: Switch to the "actual cost" method and start keeping detailed car-expense records now. Even this late in
the year, you can come out ahead by making the switch, especially when you consider jacked-up gas prices.

Be aware, however, that this tax move holds long-term consequences. Once you begi...(register to read more)

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