{"id":6436,"date":"2017-01-31T08:00:21","date_gmt":"2017-01-31T14:00:21","guid":{"rendered":"http:\/\/taxprocenter.proconnect.intuit.com\/?p=6436"},"modified":"2017-02-03T10:47:16","modified_gmt":"2017-02-03T16:47:16","slug":"advising-your-self-employed-driver-clients-dont-overlook-lucrative-mileage-deductions","status":"publish","type":"post","link":"https:\/\/accountants.intuit.com\/taxprocenter\/tax-law-and-news\/advising-your-self-employed-driver-clients-dont-overlook-lucrative-mileage-deductions\/","title":{"rendered":"Advising Your Self-Employed Driver Clients: Don\u2019t Overlook Lucrative Mileage Deductions"},"content":{"rendered":"

You may have some part-time or full-time Uber\/Lyft drivers and traditional truck drivers as clients. These drivers must keep track of their miles, in order to deduct business vehicle expenses, which can seriously lower their tax burden. Depending on what type of driver they are, there are various ways to use the mileage log and the IRS\u2019s self-employed mileage deduction to their advantage.<\/p>\n

This provides a teachable moment for the tax professional to pass along some tax advice to their clients, so that they don\u2019t miss out on important deductions and perform the proper recordkeeping throughout the year.\u00a0You may consider talking to your clients about this topic, or sending out the information to bolster your value as their trusted tax advisor.<\/p>\n

Choose a Method<\/strong><\/p>\n

First, you need to decide which deduction method to use. The IRS gives you two options: the Standard Mileage Rate Method and the Actual Expenses Method. You won\u2019t be able to take both deductions, so you need to evaluate which will bring you the biggest benefit.<\/p>\n

The Standard Mileage Rate Method<\/strong> is the simplest method for calculating your vehicle-related deductions. For the 2016 tax year, the rate is 54 cents per business mile. (It changed to 53.5 cents for 2017). That means that if you drove 10,000 business miles in 2016, your tax deduction would be $5,400. If you drove 30,000 business miles, your tax deduction would be $16,200.<\/p>\n

To claim this deduction, you need to keep a detailed mileage log that includes dates, start times and end times, the activities involved, and the beginning and ending odometer readings. With the help of a mileage and expense-tracking app, such as the one offered within QuickBooks\u00ae Self-Employed<\/a>,\u00a0you can do this automatically and integrate it with your other deduction tracking. The app also allows for easy categorization, based on business or personal trips, and won\u2019t drain your smartphone battery.<\/p>\n

The Actual Expenses Method<\/strong> allows you to deduct your vehicle\u2019s actual expenses. Eligible expenses include:<\/p>\n