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Thursday, March 13, 2008

Tax Tip Number Four

Tax Tip Number Four
It's time for the next tax tip! This week's tip is about keeping a mileage log. If you haven't already started doing this...start now! As a daycare provider mileage was one of my largest tax deductions. Even if you don't take the children you care for anywhere, you still have plenty of mileage you can claim! How do you set up a mileage log? It's simple really. First, find a notebook and pen that you can keep in your car at all times. Make sure it is something small enough not to get in the way, but large enough to hold the info. You will want to make columns for the following items in your notebook: date, starting location, starting mileage (find this on your odometer), location travelled to, reason for travelling, ending mileage. If you don't want to keep track of starting and ending mileage, just set your trip odometer to zero before you start out and record the number of miles travelled. Remember to do this before you ever pull out of the driveway and as soon as you have reached your destination. Also, remember that you can count the mileage there and back, so double your mileage for each trip. Also, keep a record if you travel from one destination to another in a single trip. For example, if you leave home, travel to the bank, and then travel to the grocery store before going back home, you will need to calculate the mileage for all legs of your trip. Now, where can you travel and count the mileage as a business expense? Of course you can count any mileage travelled while daycare children are in the car. But you can also count mileage when you go to buy groceries for child care, supplies for your business, to deposit checks from parents, errands for your business, etc. You also can count any mileage travelled to either drop off or pick up daycare children from school or other locations. This may not seem like a lot, but it adds up quickly! For even more information on other deductions for home-based business owners, see this great guide! Click Here!

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