| One of the advantages of working for yourself is you | | | | figure by the total business miles you drive in 2007. For |
| can write off a lot of different expenses to lower your | | | | example, if you drive 2,000 miles on business in 2007, |
| taxable earnings. One deduction that is very popular is | | | | your deduction would be 2,000 multiplied by 48.5 cents |
| business mileage. Any mileage you undertake for | | | | for a total write off of $970. Might it be time to start |
| business purposes can be converted into a very | | | | visiting your clients more often?! |
| healthy tax deduction. | | | | It is important to understand that this deduction is for |
| The IRS changes the rate at which you can deduct | | | | the 2007 tax year. When you site down to prepare |
| business mileage each and every year. The change | | | | your taxes on April 14, 2007 [lol], you will not use this |
| has almost always been fairly small. The last few | | | | figure. Instead, you will have to wait until April 14, 2008 |
| years, however, have seen some sizeable increases. | | | | when you prepare your taxes for the 2007 year. By |
| The gas shortages associated with Hurricane Katrina | | | | the way, the mileage rate for 2006 is 44.5 cents per |
| [damaged refineries] and subsequent high oil prices | | | | mile. |
| have both had a big impact. In fact, the rates have | | | | As you know by now, the key to limiting the pain of |
| increased more in the last two years than they did in | | | | your tax bill is to maximize your deduction. With the |
| the previous eight years combined. | | | | business mileage deduction, you can get a very health |
| Starting January 1, 2007, the rate for calculating your | | | | write off. Just make sure to document your miles in |
| business mileage deduction goes up to a healthy 48.5 | | | | case you get audited. |
| cents. To figure your deduction, you simply multiple this | | | | |