Taxes – Part 1 – Taking Full Advantage of Business Tax Deductions
As a courier you can be absolutely sure of one massive tax deduction, and that is the mileage you put on the business’ vehicle(s). This, however, demands accurate record keeping and it will be up to you to ensure that you create a flawless system for tracking the number of miles used strictly in the line of work.
Does it really make a lot of financial difference? Actually, the average rate is around $.55 per mile.
This means if you only drove around 25,000 in a year, which is actually low for a busy courier, the deduction is a whopping $13,750. This is taken right off the top of your earnings and can help to spare you thousands of dollars in income tax payments.
What else could a courier use as a deduction? Well, you already know that you MUST drive that vehicle, and this means that you must also insure it.
The premiums are a deduction, and are a complete deduction if the vehicle is used entirely for business.
Your car is going to need repairs from time to time, and these too are viewed as an allowed deduction. Although it is important to note that regular maintenance, such as an oil change or tire rotation does not qualify.
While the fuel used to power that car is not going to be a deductible, the tolls you pay to cross bridges or take certain highways can be taken off the income, and the payments made to park that same vehicle on the street or in garages in order to make deliveries are as well.
There is also the need to remain in constant communication with clients and with anyone in your home office. This means a cellular phone is required. The monthly service on this device could be a tax deduction, especially if it is dedicated strictly to business use.
There are many other deductions, and it is best to work with a CPA or tax professional to ensure you enjoy them all.