Mileage
You
can claim deductible business auto/truck expenses for driving from one client to the next in one of two ways.
- IRS
Mileage Rate: You can claim
business miles times the IRS mileage rate. IRS mileage rates for business
activities are $0.56/mile in 2014,
$.575/mile in 2015, $0.54/mile
in 2016 and $0.535 in 2017. You can add parking and
tolls to the mileage rate.
- Actual
Cost: You can claim your actual costs including depreciation times the
percentage that you use your car for business. Actual costs would include
gas, oil, insurance, repairs, etc. Payments on a note would not be
deductible. The cost of the vehicle would be deducted through depreciation
instead (or lease payments if you lease it.)
Cell phone
The
costs of a cell phone may be a business expense, but only the additional costs
in using a cell phone for business are deductible. The Tax Court has several
interesting cases on this. In one case, the taxpayer paid a flat rate on a
phone used for business and personal calls. The court held that as he paid a
flat rate for his personal phone and incurred no additional charges for
business use, he has no deduction. (Ritchie, TC Summary Opinion 2005-181).
For
an employee, if deductible, they would be entered as a miscellaneous itemized
deduction for employee business expenses.
Example
from Ritchie: "Petitioner’s cell
phone was a personal phone that he also used for business calls. Petitioner
testified that he paid a flat rate, regardless of phone usage. Therefore, aside
from the personal expense of the phone, which is rendered nondeductible under §
262, he incurred no additional charge for business use."
Scrubs
Certain
types of costs are entered as employee business expenses. These include work
clothes and uniforms if required and not suitable for everyday use. The IRS
criteria for uniforms and work clothes is in Publication 529.
