What You Need to Know About Business Vehicle Expenses

You plot the fastest route to your client’s office with an on-board navigation system. You use a hands-free cell phone to leave last-minute instructions for your staff on the way to the meeting. Your computer, presentation materials, and an extra shirt are in the back seat. In short, your vehicle is your office on wheels.

It’s also a tax deduction.

Here’s what you need to know to reap the benefits.

Overview: You can deduct auto expenses when you own or lease a vehicle and use it for business. Deliveries to customers, traveling to business meetings, and trips to the office supply store qualify as business use. Commuting generally doesn’t, even if you discuss work on your phone while stuck in traffic.

The rules: You have two alternatives for calculating the deduction: actual costs or the standard mileage rate. If you choose standard mileage in the first year you use a vehicle you own for business, you can usually switch to actual costs in later years. Choosing standard mileage for a leased vehicle locks you in to that method for the term of the lease.

What’s deductible? Under the actual cost method, deductible costs include depreciation, maintenance, gasoline, taxes, insurance, parking fees, and interest expense.

The standard mileage rate for business use during 2013 is 56.5¢ per mile. In addition, you can deduct the business portion of parking fees, tolls, certain taxes, and, if you’re self-employed, interest on your vehicle loan.

How to benefit: Maintain a log of business and personal mileage and keep receipts. Having both lets you pick the method that generates the largest tax deduction.

Call us if you would like additional information on taxes and business driving.

 

Call us at (219) 769-3616 with your questions, or email them to tlynch@swartz-retson.com.

Identity Theft is a Business Problem, Too

Businesses sometimes adopt a head-in-the-sand attitude when it comes to identity theft. That's good news for thieves. By stealing the average consumer's credit card data, a thief can run up a sizeable bill at a department store or online auction. But if the crook absconds with corporate files, a treasure trove of sensitive information (from vendors, customers, and employees) can be his for the taking.

Say you operate a local video store. In the process of signing up new members, you collect sensitive information such as credit card numbers and home addresses. One night a tech-savvy thief breaks in and steals the store's computers, thereby gaining access to all customer data you've collected. When the spending spree begins (and it will) and your customers learn of this security breach (and they will), your business reputation is headed for a nose dive.

To reduce the risk of identity theft at your company, consider the following:

· If you don't need it, don't collect it. The more sensitive information that's sitting in your filing cabinets or on your computer, the more risk you run. So don't ask for a customer's social security number and home address if all you really need is a name and phone number.

· Limit access. Staff should only be allowed to view information that's needed for their particular duties. The maintenance guy probably doesn't need to know about client health records. Perhaps the receptionist can remain ignorant about supplier identification numbers.

· Who's asking? Thieves often get sensitive information from eager-to-help staff who fall for believable stories. "Miss, my mother is in the hospital and she really needs this information for proof of insurance." When you or your staff get a seemingly legitimate request, be sure to follow up. Call the hospital directly before sharing information.

Identity theft is not just a problem for your clients; it's a business threat as well.

Call us at (219) 769-3616 with your questions, or email them to tlynch@swartz-retson.com.