Frequently Asked Questions (FAQ):
Q. What expenses can I deduct for my car?
A. We follow the federal guidelines on automobile expenses.
A business deduction is only allowed when you use your
car exclusively for business purposes. Deductible car
expenses may include: traveling from one workplace to
another, making business trips to visit customers/attend
business meetings away from your regular workplace, or
going to temporary workplaces.
We allow two methods for determining your business
1) Actual expenses – Car operating expenses (e.g.,
gas, oil, repairs, license fees, insurance,
depreciation, etc.) for the entire year multiplied by
the percentage of time you used the car for
2) Standard Mileage Rate – A more simplified method in
which you multiply the business miles and the fed/
state mileage rate (currently 48.5 cents per mile).
We highly recommend a travel log that tracks automobile
mileage for both personal use and business use.
Q. Can I deduct start up costs for my new business?
A. Yes. As a new business you can deduct up to $5,000 of
start up expenses (e.g., salaries, marketing, market
analysis, etc.) and $5,000 of organizational costs (e.g.,
legal services, fees paid to the state to incorporate).
Q. I operate a business from my home, can I deduct my home
A. In order to claim a home office expense, you must ensure
that the area of your home is used regularly and exclusively
for business purposes. If this test is met, then you would
claim any direct expenses that are used exclusively for the
business (e.g., computer, supplies, etc.). For indirect
expenses, you would compute the percentage of your
home that is being used for business purposes and apply
the percentage against any indirect expenses (e.g., utilities,
Q. What expenses can I deduct for travel, meals,
A. First, the