The Internal Revenue Service is recognizing the increasing costs of transportation and has revised the rate that taxpayers can use for deducting business-related travel expenses. For miles driven between July 1 and December 31, 2008, the new rate is 58.5 cents per mile, up 8 cents from the rate used for the first half of this year.
I would expect businesses that reimburse their employees for miles driven will follow suit.
This method for deducting travel expenses from travel is only one option. If you like, you could track all of your travel expenses, including gasoline and tolls, but it’s much simpler to keep track of the miles you drive and use the rate determined by the IRS.
IRS Increases Mileage Rates through Dec. 31, 2008, Internal Revenue Service, June 23, 2008.
2007 may be my worst tax year ever.
Not only did I fail to qualify for the full energy credit and fall out of touch with my tax accountant, but I made it worse by having a great year with my rental properties.
A great year which I did not sufficiently offset, and that’s my next mistake:
4. Failing to Balance Rental Property Income with Deductible Expenses
Psychologically, rental property ownership is a funny thing. During years when I suffer through months of vacancy or renovations, I shudder to think of the losses, wondering how I’ll make it through. Throw in court costs for evictions and the like, and I’m nearly over the edge.
Once tax time arrives, however, my tune changes, and I’m thrilled by the deductions I get to claim due to the expenses and losses. Renovation expenses are depreciated across multiple years, but it still helps to offset my primary job’s income.
2007, however, was a profitable year, with the properties fully rented for all 12 months. The rent was even paid right on time. It was my lowest-stress year as a landlord on record, and yet this is the worst possible situation for tax purposes. [click to continue…]
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