Your Business Mileage Money

driving-691751_1280-740x360The vast majority of self-employed people are sole proprietors—owners of one-person businesses. In 2012, 23,553,900 sole proprietors filed tax returns. What would you say was the single biggest tax deduction for such sole proprietors? If you said car and truck expenses you’d be right. In 2012, the latest year stats are available, sole proprietors claimed over $86 billion in car and truck expenses, amounting to 14.2 percent of  all claimed business expenses by sole proprietors. This was more than any other type of deduction they claimed.

Originally posted on the MileIQ blog. Click here to see more business and money saving ideas. 

For example, only about $34 billion was deducted by all sole proprietors for rent, and $42 billion for contract labor. If you’ve ever wondered why the IRS seems to pay so much attention to car and truck deductions, that’s why—it’s where the money is. The 57.5 cents per mile the IRS allows to be deducted under the standard mileage rate might not seem like a lot, but it really adds up.

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Stephen FishmanStephen Fishman is a regular contributor to MileIQ. He has dedicated his career as an attorney and author to writing useful, authoritative and recognized guides on taxes and business law for entrepreneurs, independent contractors, freelancers and other self-employed people. He is the author of over 20 books and hundreds of articles, and has been quoted in The New York Times, Wall Street Journal, Chicago Tribune, and many other publications. Visit http://fishmanlawandtaxfiles.com for more information on his work.
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Click here for iPhone or Android
Unlimited Drives option with code: IGNITE20 for 20% off an Annual Subscription
*Instructions on upgrading MileIQ with a promo code
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