Business Use of a Vehicle

Last week the RDTC – Tax Help Blog posted a new article in their deduction of the week series. The entry explains how to deduct expenses related to the business use of a vehicle. You can find a section of the article below, or click here for the full text.

Actual Expense Method

The first option for calculating your deduction is the actual expense method, where you calculate the exact cost of your business use. Expenses include depreciation, licenses, lease payments, gas, insurance, repairs, garage rent, etc. However, in order to calculate this deduction you will have to determine the exact percent of your car usage that was business related, which can very quickly become a huge headache. For more information on the actual expense method, check out IRS Publication 463.

Standard Mileage Rate Method

The second and less complicated way to calculate your deduction is called the standard mileage rate method. You deduct a certain value for every mile driven for business. In 2010 the standard mileage rate is $0.50 for every mile driven, plus all business related tolls and parking fees. This does mean you need to track every mile used for business. This can be done by keeping a logbook to show the date, purpose of the travel and the number of miles driven.

Claiming the Deduction

In order to claim a deduction for the business use of your vehicle you will need to file an itemized return. The costs can be included on Schedule A of your IRS Form 1040. This deduction is part of the miscellaneous itemized deductions, and so subject to the 2% Adjusted Gross Income floor. For more information read Topic 508 on IRS.gov.

134-year-old oyster company stops shucking

Whether you like them, sautéd, fried, barbequed, or the traditional half shell—If you like oysters, you’ll be sad to learn they may start to be in short supply due to the BP oil spill. According to CNNmoney.com, 67% of the nation’s total production of oysters comes from the Gulf region—Oyster shucking is big business in the Gulf area. However, due to the oil spill, one Oyster shucking company had to close up shop recently. It’s very sad, because P & J Oyster of New Orleans, Louisiana had been in business for 134 years! The problem? There simply aren’t any oysters to shuck when the waters are filled with oil. There is a lot that is unknown regarding the spill and how the market will react. With the spill and the length of time oysters take to grow to full size to be harvested, the next spawning season is in jeopardy. The president and co-owner, Al Sunseri , doesn't know what is next for his oyster business. He states that it takes oysters between 18 and 24 months to grow to full size to be harvested, and the next spawning season is in jeopardy. "There is a lot of unknown and it has everything to do with so much that we have never seen happen before."

Read the article here and tell me your thoughts.