Mileage Deduction: Are You Keeping Track for Your Taxes?

24 Jan

Backroads by the Norwegian Artist, Steve Henderson

One of my closest friends is a bookkeeper who cheerily tells her clients, “Be glad that you’re paying taxes! It means that you’re making money!”

This upbeat approach to paying the piper  does not extend so far that you give more than you have to, she quickly adds, and one of the most overlooked, yet easily recorded, tax deductions for the artist is that of your mileage.

I will never forget the time we packed 25 paintings (and they weren’t miniatures) into our Honda Civic and drove six hours to deliver them to the Lawrence Gallery in Sheridan, OR. Unpacking the vehicle, we felt as if we were in one of those Marx Brother movies featuring multiple people continuously emerging from a little car. The gallery representative told us later that she enjoyed watching us as much as she did viewing Steve’s work.

The point to this article  is not, however, that we need a larger vehicle, but that driving is a part of the artist’s business day, and as part of that business day, the mileage you put on the car is eligible for an IRS mileage deduction, in 2010, of 50 cents per business mile driven, providing that you are not already claiming depreciation for the vehicle you are using.

Before I go further on this, let me insert the caveat that I am not an accountant and do not purport to be. The information in this article reflects what I have learned in the process of marketing Steve Henderson Fine Art. Ultimately, it is best for an artist in business for himself to consult with an accounting professional regarding his individual tax situation.

Back to this mileage thing: take note of the phrase, “per business mile driven.”

Now according to CPA Man, our accountant who is also the tax assessor who plays the piano at the non-profit theater group (we really do live in a small, small town), when we drive our paintings to a gallery, as we did to the Lawrence; or when we deliver to or pick up from a show; or when we attend a reception; or when we pick up supplies for the office; or when we mail a business letter at the post office; or when we do anything connected with our business and drive our car to do it, we can deduct 50 cents per mile driven.

In order to do this, we need to keep a record of this mileage, and this is really a simple thing:

1) Buy an inexpensive monthly planner — the kind with big boxes for the days of each month — for each  car; we get ours at the Dollar Store.

2) When you head out for a business-related errand, record your starting mileage in the box of that day’s date. Also record the purpose of the errand (mail letters; deposit checks at bank; attend show; meet with client; deliver painting; purchase supplies, etc.).

3) When you return from the errand, record your ending mileage below the starting mileage.

4) Write the total number of miles driven for that errand below the ending mileage. If you have piggybacked personal errands in with the business ones, deduct these and record only the miles driven for business purposes.

5) Keep this log throughout the year.

6) At the end of the year, transfer the mileage driven to an Excel Worksheet — I record the date, number of miles, for what purpose, and in which car; I then total the miles for the month, and ultimately the year, presenting this spreadsheet to CPA Man as part of my tax receipts.

7) Keep the monthly planners, along with a copy of your spreadsheet, with your tax records.

You will be surprised at how the miles add up, and with them, the deduction. The amount of time you are spending in the car may also explain why you have been so frustrated lately, about not having enough time in the studio!

To see more of Steve’s original landscapes, seascapes, and figurative oil paintings, follow the link to Steve Henderson Fine Art. While you  are there, we invite you to join Steve’s monthly e-mail newsletter for information on recent work, upcoming shows, classes, and events.

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