Claiming Mileage Expenses

The miles that you drive which are in any way related to the operation of your daycare or the actual expenses require to maintain your automobile can be deducted from your income at tax time. There are two ways to utilize this deduction.

METHOD 1
THE IRS ADJUSTED MILEAGE ALLOWANCE
With this method you need to keep track of the miles you drive which are exclusively for daycare purposes. A trip to the grocery store to pick up food for your family AND your daycare does not qualify for toward this deduction. You need to be making the trip just for the benefit of your daycare. For the period of January 1, 1999 through March 31, 1999, you may utilize 32.5 cents per mile traveled for your business. As of April 1, 1999, this mileage allowance has been decreased to 31 cents per mile.

Click here for a good mileage record book.

METHOD 2
THE ACTUAL EXPENSE DEDUCTION
To claim expenses with this method, you need to keep track of all receipts related to the operation of your vehicle. You can include gasoline, oil, repairs, license, insurance, depreciation, parking fees, and tolls. In order to use this method, you must keep track of ALL miles traveled in the vehicle. It is wise to keep one mileage log to record business miles and another to record personal miles. At the end of the year you will determine your business use of this vehicle for tax purposes.

For more information on either method, you can request Publication 917 (Business Use of A Car) free of charge by calling the IRS at 800-829-3676 or visiting them on the Internet at www.irs.gov.

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