bake - February 2013 - 14
tax tips
Best Auto Deduction
It would make things a lot easier if one rule of thumb existed
Actual Expense Method
for choosing which method gave you the best tax deduction
If you’re using the actual expense method you can deduct
on your auto expenses: a standard mileage deduction or actual
all the expenses of operating the vehicle. That includes gas,
expenses. Unfortunately, there is no such rule. Most tax prepa-
repairs, insurance, lease payments, depreciation, etc. But
ration software will automatically select the best method if you
you’ll have to maintain records and keep the receipts of all the
input all the information correctly, but that selection is based
expenses. If you’re audited, the IRS can disallow the expenses.
upon the information you provide at that time. It can’t know
In the case of an audit, the IRS will ask for your car logs,
what you’re going to do next year.
expense documentation, etc., for all business vehicles. Agents
know most taxpayers are lax in this area and most of the
time an agent is almost guaranteed to disallow some deduc-
Standard Mileage Method
tions. You can only deduct the portion of the expenses
The 55.5¢ per mile for 2012 includes most of the cost
incurred for business use. For example, you drive
of operating the car, depreciation, repairs, gas, oil,
your SUV 10,000 miles during the year. Only
etc. In addition, you can deduct tolls, parking
expenses (but fees to park your car at your
place of work are nondeductible commuting
expenses). If you’re an employee, you cannot
deduct any interest paid on a car loan.
However, if you are self-employed and use
56.5¢
per mile is the new
IRS standard mileage
rate for 2013.
your car in that business, you can deduct that
part of the interest that reflects the business
use of the car. For example, based on the miles
driven during the year, you use your car for your sole
6,000 of those miles were for business. You can
only deduct 60% of the expenses.
Picking the Best Method
Estimate your total business miles during
the year, say 6,000. In most cases even rough
numbers will be sufficient. The numbers often
clearly tip one way or the other. Then multiply by the
IRS standard mileage rate. Use 55.5¢ for 2012. The deduc-
proprietorship 70% of the time. You can deduct 70% of the
tion would be $3,330. Next, figure your actual costs by adding
interest for the year on your Schedule C. If you itemize, you
your depreciation or lease payments, insurance and repairs.
can deduct personal property taxes on Schedule A of your
If you qualify for bonus depreciation, spread the first-year
Form 1040, whether or not you use the car for business. If
amount over several years to make comparisons more realistic.
you do business as a sole proprietorship, and use your car in
Assume that totals $5,500. Multiply by your business usage
your business, you can deduct the business part of personal
percentage. Assume 80% here. That’s $4,400, before adding
property taxes on Schedule C and the remaining portion on
in fuel costs. Clearly, the actual cost method will provide the
Schedule A.
greater deduction.
14 < FEB 2013 | bakemag.com
http://www.bakemag.com
bake - February 2013
Table of Contents for the Digital Edition of bake - February 2013
bake - February 2013
Editor's Note - Two Trends for 2013
Table of Contents
News Bites - Cup4Cup Features Gluten-Free Flour
3 Girls Cupcakes at Sports Arena
Next RBA Roadshow to Arrive in Seattle
Bruegger’s Bagels Plots Expansion
King’s Hawaiian Goes Virtual
Management - Develop a Hiring Process
Tax Tips - Best Auto Deduction
Labor Front - Wage Compliance Crackdown
Legislation - New Food Safety Rules
Ingredients - Wheat: Supplies Up, Quality Down
The Ingredient to Success
Ingredient Costs
The Drought Effect
Open Dialogue
A Dynamic New Model
Watch out for low-price guarantees
The Whole-Grain Train
Countdown to Easter
Trending Tortes
Cookies for All Occasions
Cafe - Rise of the Za
Exotic pizza combos
Products
Showcase
Classifieds
Ad Index
bake - February 2013 - bake - February 2013
bake - February 2013 - 2
bake - February 2013 - Editor's Note - Two Trends for 2013
bake - February 2013 - 4
bake - February 2013 - Table of Contents
bake - February 2013 - 6
bake - February 2013 - 7
bake - February 2013 - Next RBA Roadshow to Arrive in Seattle
bake - February 2013 - 9
bake - February 2013 - King’s Hawaiian Goes Virtual
bake - February 2013 - Management - Develop a Hiring Process
bake - February 2013 - 12
bake - February 2013 - 13
bake - February 2013 - Tax Tips - Best Auto Deduction
bake - February 2013 - 15
bake - February 2013 - Labor Front - Wage Compliance Crackdown
bake - February 2013 - Legislation - New Food Safety Rules
bake - February 2013 - 18
bake - February 2013 - 19
bake - February 2013 - Ingredients - Wheat: Supplies Up, Quality Down
bake - February 2013 - 21
bake - February 2013 - The Ingredient to Success
bake - February 2013 - 23
bake - February 2013 - 24
bake - February 2013 - Ingredient Costs
bake - February 2013 - 26
bake - February 2013 - 27
bake - February 2013 - 28
bake - February 2013 - 29
bake - February 2013 - The Drought Effect
bake - February 2013 - 31
bake - February 2013 - 32
bake - February 2013 - 33
bake - February 2013 - Open Dialogue
bake - February 2013 - 35
bake - February 2013 - 36
bake - February 2013 - 37
bake - February 2013 - A Dynamic New Model
bake - February 2013 - 39
bake - February 2013 - 40
bake - February 2013 - Watch out for low-price guarantees
bake - February 2013 - The Whole-Grain Train
bake - February 2013 - 43
bake - February 2013 - Countdown to Easter
bake - February 2013 - 45
bake - February 2013 - Trending Tortes
bake - February 2013 - 47
bake - February 2013 - Cookies for All Occasions
bake - February 2013 - 49
bake - February 2013 - 50
bake - February 2013 - 51
bake - February 2013 - Cafe - Rise of the Za
bake - February 2013 - Exotic pizza combos
bake - February 2013 - Products
bake - February 2013 - 55
bake - February 2013 - Showcase
bake - February 2013 - Classifieds
bake - February 2013 - Ad Index
bake - February 2013 - 59
bake - February 2013 - 60
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