Scene 1, Godwin & Associates,
CPA offices. March 10, 2013. Jonathan Godwin is meeting with a small
business client regarding tax deductions for his company’s 2012 corporate tax
returns.
Jonathan – “So, I see you have indicated
your business mileage at 24,650 for 2012.”
Client – “Yes, I have. I know that sounds high, but I was on the
road a tremendous amount last year.”
Jonathan – “I have no problem with that at
all. Can you get me a copy of your
mileage log so I have it for my files?”
Client – Crickets…
Jonathan – “You do maintain a mileage log,
right? We talked about this last year as
I recall.”
Client – More crickets…
This isn’t an uncommon
conversation for me during tax season. I
ask that question of everyone who claims mileage, knowing that in the event of
an audit, if there was no mileage log the deduction would be disallowed without
even a second thought. The rules are
clear…no log, no deduction.
The federal mileage rate for 2013
is $.565/mile for business travel.
Deductible mileage includes travel to meet with a client; your trip to
the bank to make a deposit; your trip to my office to meet and discuss your tax
situation; your trip to an open house; your trip to show a house….you get the
picture. Just don’t include any personal travel in there, and if your primary
office is at your real estate company’s home office, then don’t deduct travel
from your personal residence to the office (that’s commuting, not business
travel). To say that this deduction is valuable to my real estate clients is a
massive understatement, so please do yourself a favor and keep the mileage log.
Last year, Meghan bought several
and placed them in our main conference room.
So, if you don’t want to buy one, then come by here and get one for
free. I won’t judge you. After all, it cost the actor in the above
scene a tax deduction of $13,927 at today’s mileage rate for not having the
log. That’s worth a trip to our
office….we’ll even throw in some coffee to go.
