Many veterinarians use a car or truck for business and/or personal use. Are you aware of what you need to keep and how to account for your expenses? That vehicle that sits at your clinic overnight and that you never take home or use it to run for a soda at the gas station might be 100% business use. These unicorns are out there. But for most of us, the vehicle is available to and used by us when we are off duty. We might use it to commute to and from work or to help our neighbor pick up that new fridge from Home Depot. We call this mixed use. Regardless of usage, you must select between using the actual expenses of owning and operating that vehicle or a standard mileage rate. And, a deduction is only available for the business use portion in the case of mixed-use unless personal use is recognized as income to the employee affected.
So what are actual expenses and what is the standard mileage rate? Actual expenses are just that; car insurance, gas, oil change, tires, repairs, registration, licenses, and depreciation. The standard mileage rate is a $ amount you get for every business mile driven. ($0.545 in 2018). When you drive to vaccinate the cows 100 miles away you get $54.50 deduction. Pretty sweet! And same for return! Did you know you can deduct parking fees and tolls attributable to business use on the top of both methods?
You are required to retain records of a daily business mileage and expense log (overkill paperwork!). Many veterinarians keep a notepad in their car, where they track their mileage, purpose, date, and expenses as well. Some even document the Odometer Readings. How many times do you think you will forget to write it down? And yes, unfortunately, you need to keep the log even if you use actual expenses method. 😦
Embrace technology and protect your rightful deductions! There is a cool app out there, which allows you to track the miles for all your trips without you even realizing it. No need to push a button, look at the odometer or write it down. It’s super sweet and easy to use. Want to know more? Reach out to us. We would be happy to offer our favorite solution or chat with you. Start here!