Estimated tax tip savings. A business owner who commutes 15 miles each way to work can generate a minimum of $4,313 a year in tax deductions by turning personal commuting miles into business miles. Based on a net income of $100,000, this deduction results in tax savings of $1,817.
Are you treating your commute from your home to your office as a deductible expense? If so, do you have an office in your home that you deduct as a “principal office?”
If not, you’re very likely violating tax law. If the IRS were to conduct an audit, you would have to pay back taxes on those deductions, plus interest. (And, of course, this tax law violation might whet the IRS auditor’s appetite to find more unauthorized deductions.)
That’s because tax law does not generally let you deduct your expenses for your commute to work. These miles are “personal miles” and therefore not deductible.
However, as a business owner, it’s very easy for you to convert your daily trip into thousands of dollars of deductions. And better yet, these types of deductions are 100 percent IRS-approved!
Frankly, the solution to this commute-deduction problem is so easy that ... Log in to view full article.