When it comes to saving money at tax time, I am a stickler for getting the most bang for your buck. That is because there are many opportunities to legally reduce what the amount of tax you pay and create more room for savings.
To start the new year right, the following tip will help be more productive and increase your bottom line.
As a business owner, one area of taxes that you may be curious about is vehicle related write-offs. If you are like many of the clients that I mentor, you may be missing out on all that you can get from this deduction. According tax rules, you have the luxury of claiming costs like the monthly note or lease that you pay for your vehicle, oil changes, and gasoline. Be sure not to overlook other bonuses like depreciation on vehicles that you own and the actual business miles that you rack up during the year.
Now the trick to making the most of this deduction is getting in the habit of keeping stellar records because trips missed here and there can cost you. Avoid leaving money on the table by logging in all of your trips, client meetings, and errands that you run for business. Believe me. This one action can be a needle mover as the miles add up on your vehicle.
So how do you keep good automobile records without adding more work to your life?
First, start by resolving to do it. That may sound simple but this tip only works when you vow to follow this habit. Rory Vaden, author of Take the Stairs, emphasizes the importance of habits this way:
“What you do all the time matters more than what you do some of the time.”
Next, try these simple mileage tracking tips:
Use What You Own.
For a quick and easy log, use your camera phone. That’s right, this little piece of technology that you have invested in does a lot more than make calls. It makes you more profitable by creating a log of deductions that you get to claim at tax time.
Use Mileage Tracking Tools
Mileage trackers are also a great way to stay productive and create more savings in your bottom line. One of my favorites is MileIQ, which is available in both the Apple Store and on Google Play. It’s the perfect solution that takes the thinking out tracking.
Go With the Traditional.
If technology doesn’t appeal to you there’s always the tried and true method of using a journal to stay on top of miles driven. You can purchase one at your local office supply store or print one out for free here.
Regardless of your method of tracking, one thing is for sure, you will keep more of what you make when everything is recorded.
If you own a small business and haven’t put a system in place for tracking your finances, then a chat with me might be in order. I can help you choose and set up a simple system to stay on top of the financial side of business and keep more of the profit that you make.