Tuesday, May 18, 2010

Tax Deductable Business Expenses

For the next few entries I’ll be writing about business expenses that are tax deductable for the artist.  First let’s take a look at automobile vehicle expenses.  There are two ways you can take a deduction for auto related expenses.  There is the standard mileage allowance, which for 2010 is 50 cents per mile, or there is a direct right off of incurred expenses. 

To use the standard allowance you will keep a record of all business related travel.  It’s not required that you keep an odometer reading but you will need to keep good records of all of your travel.  This may include gallery trips, trips to classes and workshops, shopping for art supplies, etc.  If you record all these trips on your appointment book you will have a handy reference to tally the total travel for the year.  Your deduction will be the total business mileage multiplied by 50 cents.

The other method is to take a direct right off of actual expenses.  You will have to keep a record of fuel purchases, repairs, insurance and also depreciate the cost of your vehicle.  If you use your vehicle for both business and personal travel your deduction will be based on the business percentage of the total use. 

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