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Friday, January 13, 2012

Schedule C, page 2 - Information on your Vehicle

I'm not a tax accountant. Read the instructions for yourself or consult a tax attorney. That should be the last time I have to say that :)

Schedule C
Schedule C Instructions

All that's left is information about your vehicle. Mileage is a BIG deduction. You'll definitely want to be sure and use it!

Line 43 - When did you place your vehicle in service for business purposes? This will be the date of your first shopping trip in your current vehicle, regardless of the year.

Line 44 - Of the total number of miles you drove your vehicle during 2011, enter the number of miles you used your vehicle for business, commuting, and other. The business line will be all the mileage from your road trips, thrifting stops, post office, trips to Walmart for bubble wrap, etc. ALL business-related driving. And here's a tip for this year: any time you're out running errands, stop into Goodwill. Whether you buy anything or not, you can still deduct the mileage for stopping to look. This way, you will be able to deduct the mileage for getting groceries. You should only deduct the miles from your house to the thrift store though. If the grocery store is 10 miles from your house, but Goodwill is only 7 miles from your house, you should deduct the 14 mile round trip to Goodwill, not the 20 mile round trip to the grocery store. But that's 14 miles you wouldn't have been able to deduct if you hadn't stopped in to shop.

The commuting line is for miles driven from home to work. The other line is for all other miles. You don't need to keep track of them, but you should have a pretty decent estimate of how many miles you drove total throughout the year, which you can use to figure out how many miles weren't business and commuting.

Lines 45-47 are simple yes or no questions. If you don't have a written record of your mileage, I suggest you make one. Hopefully you've kept track of when and where you shopped, so it would be very easy to create a written record. I use a pocket calendar. When I make a trip somewhere, I just jot the mileage down on the correct day. Then I add them up at the end of the year.

That is IT, folks! The very last section of the Schedule C is for "Other Expenses," but unless you have some extenuating circumstances, I'm pretty sure everything has already been covered elsewhere on the form.

Good luck with your tax forms this year. Remember: just take it one step at a time. If you get stuck, read the instructions. If you are still stuck, don't take my word as ultimate inerrant truth. Please PLEASE double check with a tax accountant if you are unsure.

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