Welcome to the Planning for Practice Success Newsletter

Practice Startup Success
Information Advice Encouragement

January 29, 2007
ISSN 1934-3248

EXTRA! SPECIAL EDITION!

Mileage Rates for 2007 (Since I forgot to include this discussion in the original newsletter):

If you want to claim a deduction for a car used for your business, there are two ways to do this:  You can use the actual cost method, which means keeping track of EVERY cost associated with the use of the car (see list below), or you can use the standard mileage rate (SMR) which is 48.5 cents a mile for 2007.

If you use the actual cost method, you will have to track all of these costs:
* cleaning, inside and out; waxing
* depreciation, if you own the vehicle
* gas and oil
* insurance
* interest on a vehicle loan
* lease payments, if you lease the vehicle
* license fees, if substantially based on the value of the
vehicle
* motor club membership
* parking and garage rental
* personal property taxes
* repairs and maintenance
* tires and supplies
* tolls

I'd suggest you use the SMR, to keep things simple.  Don't forget that the only costs you can deduct are those associated with "business use" of the vehicle.

You MUST keep records on your use of the car; the IRS actually does ask about this.  Keep a notebook in your car and jot down the mileage and reason for each business trip. You will also need to know how far you drive between your home and office, as well as the number of commuting trips.  The IRS asks about this too.

Finally, you'll need to know the percentage of mileage driven for business purposes.  Sounds like a lot of trouble, and it is, but if you don't do it, the IRS won't allow the deduction.
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Ask Dr. Jean Murray a question: email her at jean@dcpracticesuccess.com
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Best wishes for your continued success,

Jean Murray
Planning for Practice Success
Online at:   http://www.dcpracticesuccess.com

The most absurd and reckless aspirations
have sometimes led to extraordinary success.
-- Vauvenargues

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